First UK industry climate agreements unveiled

15 energy-intensive sectors commit to reducing emissions in return for energy tax discounts

Fifteen UK industry sectors have committed to improve their energy efficiency or cut greenhouse gas emissions in return for big discounts on the country's forthcoming industrial energy tax, environment minister Michael Meacher announced today. Over 40 sectors have been negotiating such voluntary agreements with the government in return for 80% discounts on the climate change levy (CCL), which is to be introduced on 1 April.

The CCL is the UK's flagship Kyoto protocol compliance measure (ENDS Daily 17 November 2000). The government calculates that it will cut carbon emissions by 2m tonnes by 2010 compared with 1990. Voluntary agreements with specific industry sectors should add a further 2.5m tonnes reduction.

Responding to sustained industrial criticism of the tax since it was first proposed in 1999 (ENDS Daily 9 March 1999), Mr Meacher today insisted that the CCL would not threaten the competitiveness of UK businesses. Industries in other EU member states were facing similar taxes as all countries searched for ways to meet their Kyoto protocol targets, he said. The minister also expressed confidence that nearly all the 40-odd planned voluntary agreements would be finalised before the CCL takes effect on 1 April.

Each industry signing up to a ten-year voluntary agreement is to have its compliance assessed every two years. If any sector fails to meet its targets then the member companies that have not met their individual targets will lose their entitlement to the CCL discount for two years. Discounts can be regained if performance is improved.

The agreements require EU clearance under European state aid rules. Ministry officials said today that the European Commission's initial reaction had been "favourable" and they were confident of receiving approval.

The industries whose agreements have been announced today are: cement, breweries, maltsters, motor manufacturers, steel, non-ferrous metals, lime, animal feeds, renderers, printing, composite wood-based board, metallurgical slag grinders, semiconductor manufacturers, mineral wool producers and cathode ray tube manufacturers.

Follow Up:
UK environment ministry, tel: +44 20 79 44 30 00, and CCL negotiated agreements.

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