Emissions Plan Leaves UK Isolated

Press release issued Thursday 6th May 2004 – 17:50 pm

The Energy Intensive Users Group expressed dismay at the latest proposals to cap CO2 emissions submitted to the Commission earlier this week. The government is continuing to propose swingeing cuts in CO2 emissions – twice what is required to meet our international commitment under the Kyoto protocol – whilst European competitors are planning to let their emissions grow.

The consequence will be internationally uncompetitive electricity prices, around 40% above current levels by 2010. EIUG has warned that unilateral action on emissions will encourage the migration of energy-intensive industries offshore without reducing global emissions.

EIUG’s Director, Jeremy Nicholson, said: “Climate change is a serious issue but it will not be addressed by one sided heroic gestures. The UK remains fundamentally out of line with our European competitors on this issue. We will see if the Commission can persuade the other countries to abide by their Kyoto commitments. If not, we cannot be expected to go it alone without irreparable damage to our competitiveness.”

The UK proposals contrast with countries like Germany, Italy, Austria and Portugal who are effectively abandoning their Kyoto commitments by allowing emissions from power generation to rise, in order to avoid damaging their economies.

Notes to editors:

  1. The EIUG represents the UK’s industrial sectors (above) for which secure internationally competitive prices are a matter of commercial necessity.
  2. Global Insight are predicting UK electricity prices will rise up to 40% by 2010 as a result of emissions trading, far more than in competitors like Italy, Spain and the Netherlands.
  3. The EU emissions trading scheme is supposed to go live in 2005, although doubts have been raised right across Europe about the practicality of this timetable. The EU is the only part of the world where such a scheme is being considered.
  4. The EU’s competitors like China, India and other developing countries have no obligations to restrain emissions under the Kyoto protocol. The USA and Australia have rejected the treaty altogether. The Kyoto protocol cannot now come into force unless ratified by Russia, which has yet to confirm its intentions. President Putin’s economic adviser has said Kyoto “dooms Russia to poverty, weakness and backwardness” and would be “a millstone for Russia’s economy”, suggesting it is unlikely to ratify.