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Press Release

CPI on the Energy Bill

7 April 2011

As an Energy Intensive Industry (EII) paper looks to government to ensure continuity of energy supply at lowest (or at least internationally competitive) prices.

Unfortunately, energy policy is now intrinsically linked to the achievement of climate change goals and targets which in the case of the UK means that we face a barrage of measures, the aim of which is to reduce our carbon emissions. This means that we are not replacing our aging power stations at lowest cost and this will feed through into higher prices for the energy that we consume.

On top of this we face the unilateral imposition of a carbon floor price which will undoubtedly raise costs significantly for UK manufacturers. This will come on top of the EU’s Emissions Trading Scheme, the third phase of which comes into effect in 2013 and will be far more pernicious than previous phases.

It really is time for government to undertake a detailed cumulative impact assessment of all energy, climate change and environmental measures and then act to ensure that UK manufacturers – especially the EIIs – are not forced to off shore to parts of the world where industry is less regulated.

Such a move might help the UK to reduce its energy consumption and its carbon emissions but will do nothing to reduce our carbon consumption through the embedded carbon of products that in future we will need to import. It will also do the overall economy tremendous harm through raising unemployment and adversely affecting our balance of payments.

So let's have a policy which is truly aimed at securing energy supplies and at internationally competitive prices for EIIs such as paper.



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