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Fears Green Taxes May Devastate North East Industry

CONCERN is mounting that the Government’s green taxes could devastate the very process industry nurturing many North East Top 200 companies and their supply chains.

Nationally, this sector employs 200,000 people directly, 400,000 indirectly, and accounts for 15% of UK exports – all of this mostly in the North East.

But it will suffer in the race to cut emissions by 34% from 1990 levels by 2020, says the Institute for the Study of Civil Society (Civitas).

The society is backing a call manufacturing group EEF has made for a review of Britain’s green policies. It is convinced the application is damaging industrial growth generally. Major firms on Teesside have also jointly criticised the Government’s energy strategy, claiming it is making UK manufacturers less competitive.

The firms, including petrochemical giant Sabic, Lucite International and GrowHow, say costs for energy-intensive chemical firms are rising, hitting investment and jeopardising jobs.

Tony Sarginson, who speaks for the EEF in the North East, says: “Industry on Teesside accepts that addressing climate change comes at a price. But we are fast reaching a tipping point where firms internationally mobile will say enough is enough.”

Civitas says the British government’s goal transcends any other nation’s target, but the approach by the “greenest government ever”, will actually undermine the UK’s ability to reduce its greenhouse gas emissions – smothering the emerging low-carbon economy at birth.

The Civitas report says the energy intensive chemical industry will be disproportionately hit by energy bills even though it produces many products beneficial to the environment, such as catalysts and insulation.

David Merlin-Jones, author of the Civitas report, wants to see climate change tackled not through hasty decimation of industry, but by a long-term nurturing of existing low-carbon innovation as already evident in the chemical sector.

Instead, the average energy intensive firm’s energy bill could rise to £17.5m by 2020 from £3m now.

Dr Stan Higgins, chief executive of the North East of England Process Industry Cluster, says: “Anything approaching £30 a tonne of CO² will be prohibitive to UK chemical production.

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