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A Policy Challenge: Energy Intensive Manufacturing and Carbon Reduction
Carbon Connect and The Associate Parliamentary Manufacturing Group (APMG) held a joint event on 14th December in Portcullis House to address opposing concerns regarding the UK’s energy policy and its impact on the manufacturing sector. While some environmental protection groups argue that the government has bowed to pressure from manufacturing lobbyists, impeding any significant progress on climate change reduction; others in energy-intensive manufacturing believe that the UK’s energy policy has penalised crucial industries and made it uncompetitive. The event featured key stakeholders and leaders from both sides of the debate.
Greg Barker, Minister of State for Energy and Climate Change, stressed the Government’s position that it will not sacrifice the UK’s manufacturing sector for its climate change policy. ‘Decarbonisation must not mean de-industrialisation’, he said. Having recently negotiated on climate change with world leaders in Durban, the Minister argued that UK manufacturers have an opportunity to capitalise on developing countries’ commitment to low-carbon technology. As well, through Government projects such as High Speed 2 and off-shore wind, there is immense potential for economic growth while developing the necessary technologies and infrastructure that will secure a low-carbon future for the UK.
An industry response to Mr. Barker’s comments was made by Ian Goldsmith of Tata Steel, who welcomed the Minister’s pledge for manufacturing support but said they awaited the full details of the Government’s upcoming measures. They also cited concerns that energy costs are significantly higher for manufacturers in the UK compared with countries such as Germany, but also that the EU as a whole was pricing itself out of the international market.
Attendees also heard from Professor Paul Ekins from University College London, who questioned the assertion that the UK’s energy policy was to blame for its lack of competitiveness in manufacturing, citing Denmark and Sweden as examples of countries with thriving industries alongside carbon reduction programmes.
With a recent Environmental Audit Committee report calling for more evidence from industry on the risks of ‘carbon leakage’, and some commentators labelling the £250 million Autumn statement subsidy as a ‘polluters charter’, this dispute shows no signs of ending soon.
Read our full event briefing here.
Greg Barker, Minister of State for Energy and Climate Change, stressed the Government’s position that it will not sacrifice the UK’s manufacturing sector for its climate change policy. ‘Decarbonisation must not mean de-industrialisation’, he said. Having recently negotiated on climate change with world leaders in Durban, the Minister argued that UK manufacturers have an opportunity to capitalise on developing countries’ commitment to low-carbon technology. As well, through Government projects such as High Speed 2 and off-shore wind, there is immense potential for economic growth while developing the necessary technologies and infrastructure that will secure a low-carbon future for the UK.
An industry response to Mr. Barker’s comments was made by Ian Goldsmith of Tata Steel, who welcomed the Minister’s pledge for manufacturing support but said they awaited the full details of the Government’s upcoming measures. They also cited concerns that energy costs are significantly higher for manufacturers in the UK compared with countries such as Germany, but also that the EU as a whole was pricing itself out of the international market.
Attendees also heard from Professor Paul Ekins from University College London, who questioned the assertion that the UK’s energy policy was to blame for its lack of competitiveness in manufacturing, citing Denmark and Sweden as examples of countries with thriving industries alongside carbon reduction programmes.
With a recent Environmental Audit Committee report calling for more evidence from industry on the risks of ‘carbon leakage’, and some commentators labelling the £250 million Autumn statement subsidy as a ‘polluters charter’, this dispute shows no signs of ending soon.
Read our full event briefing here.
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