February 2004
Is the "End of the Line" in Sight?
Government proposals to reduce CO2 emissions could see an end to wide scale automotive manufacture in Britain, according to the Society of Motor Manufacturers and Traders (SMMT).
It has been rumoured that the government has conceded to car manufacturers that plans to cut carbon dioxide emissions by up to 20 per cent could cripple the automotive industry. The admission has raised hopes that the government may retreat from the ambitious carbon reduction targets they set within the Draft National Allocation Plan (NAP) last month.
It also highlights again, the deep divisions across the Government on how to introduce the carbon emissions trading scheme required under EU law. The Department for Environment, Food and Rural Affairs wants the Government to take a leading position in Europe in the hope of convincing other EU states to follow its example. However, the Department of Trade and Industry and the Treasury were understood to be alarmed that strict emissions targets could seriously hamper the manufacturing sector. So far ministers have hidden their disagreements and said that any weakening of the targets would be within the overall cap on emissions.
It is not yet apparent however if many other European countries will follow the UK's lead. Already there are indications that the German government is in negotiations with its industrial representatives to come up with a plan that will be a lot kinder to manufacturing business than that proposed in the UK. Irelands recent announcement that its government will actively trade carbon to support its national allowances will also fuel claims that the UK plan is just too ambitious and will have devastating affects on manufacturing.
According to the SMMT, civil servants admitted that the motor industry's carbon reduction target could damage the industry. Officials have agreed to hold another meeting with industry representatives and Customs & Excise officials. Christopher McGowan, chief executive of the SMMT was keen to point out the way the motor sector has worked hard to improve its environmental performance, including a commitment to cut emissions from manufacturing sites by 15 per cent from 1995 levels by 2010. Under DEFRA's proposals, which were drafted as part of the UK's implementation of EU Emissions Trading Scheme, qualifying sites would be forced to cut carbon dioxide emissions by up to 20 per cent. The rate of reduction is eight times greater than specified under EU proposals and 10 times more onerous than targets set in the Kyoto protocol. If the UK government chose 2002 as its base line, it would fail to take account of the huge investment already made in modernising many British-based plants in the late 1990s, with corresponding improvements in environmental performance.
The government's proposals to combat global warming sector by sector have already brought warnings that electricity prices could rise by up to 80 per cent by 2010 and spell the end for coal-fired power stations that account for 35 per cent of UK power. The Energy Intensive Users Group, has said that the plans would force industry offshore where environmental controls were lower.
All industries are eager to ensure that no greater administrative or cost penalties must be levied on UK manufacturers than those operating in mainland Europe however with the UK taking such a bold and prominent move with its Draft NAP, alarm bells continue to ring within British business.
Pro Enviro has extensive experience with both UK and EU Trading Schemes and the associated legislative mechanisms, From IPPC and GHG applications and Climate Change Agreements to the calculations of trading conditions as risk management options.
For an informal chat or further insight into Pro Enviro's solutions for your carbon related issues contact Richard Whitaker.
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