Energy Bill still holds threats for UK chemicals manufacturers
3 Dec 2012
London – UK chemicals makers need more details of measures to protect energy-intensive industries from rising energy costs – as announced by UK energy and climate change secretary Ed Davey alongside his launch of the Energy Bill.
There is now some clarity about the UK’s low-carbon energy needs, said Steve Elliott, head of the UK Chemical Industries Association (CIA) – noting Davey’s commitment to exempt industries such as chemicals, cement and steel, from the extra costs of subsidising renewables and nuclear generation.
“We welcome the move to provide energy companies and industrial consumers with more certainty on the future electricity market framework,” said Elliot.
However, more needs to be done to secure increased investment in the UK chemical industry, argues the CIA, whose members contribute an estimated £80 million a day to the country’s economy.
“It is vital that [low-carbon generation] is achieved in a cost effective manner to help ensure the UK’s future as a competitive location for the chemical sector,” said Elliot. “We look to the more detailed announcements later this year and next for further reassurance.
“These costs would otherwise threaten to put us further out of step with countries in which industrial consumers do not face such costs, like the US, or where these costs are already mitigated, like Germany.
“It will therefore be important that the UK exempts a sufficiently broad range of energy intensive activities and also looks at the rising costs of existing renewable subsidies.”
The CIA boss also wants to see a continuing role for gas as part of the generating mix, including the exploitation of unconventional gas in the UK.
Gas is also a critical source of energy and raw materials for the chemical sector, said Elliot, adding that the Chancellor’s Autumn Statement should include new measures to incentivise industry’s use of energy-efficient combined heat and power.
