Chemical bosses today expressed indignation at the latest government assessment and interpretation of future energy costs faced by a business sector critical to the UK’s economic recovery and future low carbon growth. Responding to the publication by DECC of a cumulative impact assessment,  the Chemical Industries Association were deeply critical of government’s suggestion that electricity prices would rise by 52% (without taking account of inflation) in less than a decade.  As if this huge increase was not significant enough, Industry believes that the actual rise due to government policies could be nearer 100% when you take a commercially realistic view of cost pass-through.

The 52 % price rises come about as a result of a number of government policies, the latest of which is the Carbon Floor Price Support Mechanism

CIA Chief Executive Steve Elliott said “Whilst I welcome today’s publishing of the cumulative impact of the UK’s energy and climate change policy measures on chemical businesses, which shows that significant action needs to be taken to counter these cost increases, I remain dismayed that the government should want to proudly pursue implementation of policies that will result in an increase of such magnitude.  Comparing the impact with many competitor businesses in other countries, I can just imagine how they will be rubbing their hands in anticipation.  It’s time we recognised the true policy cost comparisons with other countries where greater relief is on offer. Chemical businesses are ready and willing to work with government on getting this right for our country.  

He continued “the chemical industry is a solution provider in making the change to a low carbon economy through our products and technologies such as home insulation and lighter motor vehicle parts.  Policy measures such as these, however, will threaten our contribution to the greening of the UK economy and do very little to signal the UK as a competitive place to invest”

Contact Name: Fiona Ferguson