Chancellor needs plan for industrial energy efficiency

The Confederation of Paper Industrieshas written to Chancellor George Osborne ahead of his statement tomorrow urging him to adopt a range of measures to help the move to a low carbon economy.

CPIwants to see a major industrial energy efficiency programme, paid for by allocating a substantial amount of the money raised from industry in Emissions Trading Scheme and Carbon Price Floor (CPF) taxation.

The industry body is also calling for a rethink of the CPF cost escalator.

“An increase in electricity related carbon costs from effectively zero in 2012 to £33 (per tonne carbon dioxide) in 2020 is simply competitively unsustainable,” it said.

“Ideally, we would seek to abandon the CPF altogether.”

CPIis also calling on Mr Osborne to “reward and support investment in on-site electricity generation for self-use by exempting it from taxation – present policies are destroying the economic case to invest”.

The group said that for energy security, a mix of generation technologies is required and that gas will have a major role to play through to at least the 2030s.

CPIalso wants Mr Osborne to support the further deployment (and retention of existing plant) of more efficient Combined Heat and Power (CHP) generation through feed-in tariffs or other support mechanisms.