The proposed introduction of a floor price for carbon could wipe out the profits of construction product manufacturers, materials companies are claiming.
Product makers are lobbying the government independantly and through trade associations to rethink the measure, which they say could double energy costs for intensive energy users.
However, the chancellor-who in March announced a £16 per tonne carbon price from 2013 in his Budget, rising to £30 per tonne by the end of the decade – sees the plan as a way to guarantee investement in the UK’S energy infrastructure, including new nuclear power stations, without public spending.
Budget incentives for clean energy users, through the climate Change Levy, will be just a quarter of the size of the cost increases created by the floor price. A carbon price will not be introduced in Europe until 2017. An analysis by the Energy Intensive Users group shows that energy costs for a typical product manufacturer turning over £100m could rise from just under £20m to almost £40m
