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2020 / 2021 Edition

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Brussels thwarts reduced carbon and energy costs

UK trade associations disappointed and frustrated at EU decision on energy-intensive industries

FOLLOWING last week’s decision by the EU College of Commissioners to adopt new Environmental and Energy State Aid Guidelines, leading UK energy-intensive industry bodies expressed their severe disappointment and frustration that help with crippling energy costs promised by the UK Government will not now be forthcoming to the cement, ceramics, kaolin and ball clay and lime industries.

The decision in Brussels undermines George Osborne’s statement in the Budget and directly contradicts what Business Secretary Vince Cable also said last week in the House of Commons, when he made clear that ‘We believe in it [energy-intensive industry], and it is important that it is able to compete on a level playing field. That was the purpose of the changes announced in the Budget and we are now actively pursuing state-aid clearance to make sure that these compensation mechanisms go through’.

Dr Cable went on to say ‘The only concern from the industrial point of view is that energy-intensive industries should have those costs offset. Under the mechanism the Chancellor has proposed, which we are now pursuing through the European Commission, they will be offset’.  

While some energy-intensive industries will receive compensation against the UK’s unique carbon price support tax, sectors such as those represented by the British Ceramic Confederation and the Mineral Products Association (MPA), will fall foul of a technicality in the new guidelines, which excludes electro-intensive manufacturing by their members.

Commenting on the severe blow to the competitiveness of the cement, ceramics, kaolin and ball clay and lime industries, the chief executives of the two trade associations, Nigel Jackson for the MPA and Laura Cohen for the British Ceramic Confederation, said: ‘The UK Government has recognized the importance of our vital manufacturing industries to the economy and jobs. They want to help our members stay in business in this country where we face some of the highest electricity costs in Europe and are vulnerable to rising imports.

‘Yet, in the face of their best intentions, UK Ministers have been thwarted by these new rules from Brussels. Our members will pay the price of this unequal treatment, further undermining their competitiveness globally and specifically in Europe. We call on George Osborne and Vince Cable to work urgently with us to find a way of delivering on UK policy whilst at the same time securing the future of these essential industries and the jobs we support.’

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