My Government will introduce a bill to… replace the Carbon Price Floor with a mechanism that ensures UK manufacturing pays no more, either directly or indirectly, to emit carbon than our major European competitors.
The forthcoming Queen’s Speech will be judged by the Paper Industry on measures announced to restore confidence in the UK’s ability to provide secure energy supplies, at internationally competitive prices.
Confederation of Paper Industries(
CPI) is not convinced that the UK’s slavish commitment to meeting the provisions of the Large Combustion Plant Directive is in the best interests of energy consumers, whether they be domestic or industrial. It is surely unwise to be closing existing power plants before reliable alternative sources of supply are in place.
It is also unwise to pursue renewable and carbon reduction targets which many commentators now regard as wholly unrealistic. The UK’s current dependence on coal and gas as fuel sources cannot be replaced in the timescales currently envisaged.
CPItherefore urges the Government to reassess its timescales over the short, medium and long term for the introduction of renewable energy sources and to measure success in terms of carbon consumption and not carbon emissions.
Specific measures are needed to reduce the subsidy in support of the large-scale burning of wood as a “renewable” source of energy. Energy-only biomass is not economic or environmentally sound. It also threatens supplies of an essential raw material for those industries that traditionally use outputs from sustainably managed forests.
Conversely, it is widely recognised that forest-based materials used on a relatively small scale in industrial heat and power generation, do provide significant improvements in energy efficiency and carbon reduction. Such plants are also able to feed the grid with any excess power produced. These Combined Heat and Power (CHP) plants offer a “quick fix” solution to reducing the environmental impacts of industrial production. However, they are extremely expensive to construct and operate. Enhanced capital allowances are needed, as is a total exemption from all energy or carbon taxes.
CPIwould also like to see a package of measures introduced which are designed to speed up the process of developing shale gas reserves in the UK and to increase gas storage capacity. We recognise that the Government has already taken a number measures to reduce the impact of climate change policy, but it has not gone far enough. If we are to maintain our current trajectory, we need a compensation package which exceeds the current £250m (for all Energy Intensive Industries and spread over two years). It would be far simpler to cancel the UK’s unique Carbon Price Floor and to announce that the Carbon Reduction Commitment is to be scrapped forthwith.
There also needs to be an accompanying announcement that government would not reintroduce such measures until there is a global agreement in place to cap carbon emissions.
The UK needs to create a level playing field with the rest of the world if we are to prevent carbon leakage in the future.
Since 1990, the UK Paper Industry has reduced its energy consumption per tonne of production by 34% and its carbon emissions by 42%. We have done our bit and with the right set of policies in place, we could do more. We cannot be expected to remain internationally competitive whilst carrying government imposed burdens which are not placed on paper producers in other countries.
The Queen’s Speech provides the Government with the opportunity to announce measures to restore confidence in the UK’s ability to retain secure supplies of energy at internationally competitive prices, so helping to keep paper manufacturing in the UK over the long-term.