Carbon budget could 'wipe out' UK chemicals industry

London – The UK’s £60 billion chemical industry could be decimated unless measures are taken to cushion it from the impact of the government’s latest carbon-reduction targets, the Chemical Industries Association has warned.

The government is to put in place legally binding targets that will lead to a 50% cut in greenhouse gas emissions (on 1990 levels) by 2025. It also unveiled package of measures targeting an 80% emissions reduction by the year 2050.

Reacting to the Carbon budget announced by UK energy and climate change secretary Chris Huhne, the CIA says transitional support measures must be effective or industries that make carbon-saving products will be wiped out.

Acknowledging that government has accepted the need for transition measures, boss of the Association Steve Elliott has warned that unless they are effective the cumulative policy impact on energy-related costs – already the highest in Europe – lifts from 10% to over 100% of profits - turning profitable companies making green products into loss-making concerns.

Elliott said he and other industries want to work with government to make sure the green future can be delivered. But, he warned, if the measures “are half-hearted, manufacturing jobs and companies, who are delivering low-carbon solutions, will be ripped out of the industrial heartlands of the UK with very little prospect of new businesses being attracted to invest.”