Chemical industry agrees to cut energy usage

Assuring their place in the government's good books in the run-up to the Kyoto climate summit, UK Chemicals Industry Association members have agreed to cut their energy consumption by 20 per cent per tonne of product by 2005, compared with 1990 levels. The move will lead to massive reductions in carbon dioxide emissions, according to the Department of the Environment, Transport and the Regions (DETR).

The promise was made against a background of steadily-rising productivity. UK chemical output has risen by about 18 per cent since 1990, according to the CIA's latest economic bulletin, and further growth is expected. Cutting consumption per tonne of output may therefore not lead to spectacular cuts in overall consumption. However, the DETR estimates that carbon dioxide emissions should fall by 550000-900000 tpa 'over and above reductions which would otherwise have resulted from business as usual improvements.'

The government has praised the agreement, which was voluntary. 'This positive approach is just what I would expect from Britain's world-class chemical industry,' environment minister Michael Meacher enthused. But the minister expects an even better performance. 'Since a cut of 14 per cent has already been achieved between 1990 and 1997, I believe the 20 per cent target by 2005 can not only be achieved but can be exceeded,' he comments. 'I look to the industry to do this and to achieve an improvement nearer to 30 per cent, if not by 2005 then at least by 2010.'

The economics bulletin highlights the continuing strength of exports from the UK; despite the rising pound, export volumes have held steady over the past year, and have increased by over 40 per cent since 1990. Home sales have fallen, however, possibly eroded by imports. Capital expenditure rose by 9 per cent in real terms in 1996, but this is set to slow this year to a 3.5 per cent rise, and will fall next year by 3 per cent.