Carbon targets could drive out steel manufacturing, warns CBI

Tough carbon emissions targets could force steel manufacturers to shift production and jobs abroad, putting the UK at a “serious disadvantage”, a business group has warned.

Ahead of the climate change talks that begin in Copenhagen today, the CBI has urged the United Nations to introduce a level playing-field on emissions caps, so that the UK can take advantage of a growth in new green jobs such as in offshore wind power production, low-carbon vehicles, carbon finance dealing and clean coal.

John Cridland, CBI deputy director-general, said: “There needs to be a level playing-field, or UK companies could find themselves at a serious disadvantage as manufacturers of commodities such as steel or cement shift production to countries where emissions targets aren’t as tough.”

The United Nations Climate Change Conference is aiming for an international agreement to reduce emissions from greenhouse gases. It is the biggest climate meeting in history, with 15,000 participants from 192 nations, lasting two weeks.

The CBI has today published a report, Trading Up: The Future of Emissions Trading, which recommends ensuring that the cap is set at the right level, and that firms exposed to international competition are protected.

The report said: “Cap and trade policies can be adjusted to reduce the risk of so-called ‘carbon leakage’: when energy-intensive businesses exposed to international competition, shift investment or production outside the EU due to the cost of climate policies that their international competitors do not face.”

Last month manufacturer’s body the EEF warned that the UK needs a major step-change to become the premier location for the low-carbon industry.

Energy adviser Roger Salomone said “major weaknesses” remained in enticing new companies to locate in the UK, including the supply of long-term core skills, and questions over the tax system which could discourage potential companies from setting up.

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