Commenting on today’s Energy Bill, Steve Elliott, Chief Executive of the Chemical Industries Association said:

“Manufacturing in the UK needs help and support to deliver the green future we all want to see. That help does not have to be free handouts but just a halt to crippling costs would be a start. I am afraid this Bill, which has some attractive parts, will yet again heap more cost on to business. In a globally competitive market I worry that companies will have further reason to move investment away from the UK. The nuclear industry does need support but if that support comes through heaping the cost onto already hard-pressed customers then that customer base will diminish.

In our sector – where over 70% of companies are foreign headquartered and where we have a unique and underpinning role in making the products and technologies that deliver the green economy- an unaffordable business model will make that harder at the very time when we should be making it easier.

The Bill contains some measures we do support such as to ensure secure UK supplies of electricity under the low carbon transition. However, to ensure growth, it’s also vital that competitiveness impacts on sectors like chemicals are minimised. Today’s proposals for Electricity Market reforms show there is still much work to do.

While the Bill promises to assist power developers to make early investment decisions, it only reaffirms government’s commitment to explore the options to reduce EMR impacts on energy intensive sectors like chemicals.  And there is no proposal on how to re-incentivise our sites’ energy efficient combined heat and power generation which offers more cost effective carbon savings than many of the technologies being pursued under the EMR.  We look forward to these issues being addressed promptly as part of a fully fledged strategy for energy.

We agree with the government that Electricity Market Reform measures need to be as cost effective as possible and to complement the market.  As part of this it’s important that Contracts for Difference and the Capacity Mechanism work together and that due weighting is given to this Autumn’s gas generation strategy.

The devil’s in the detail! “

Notes to Editors

For an interview with Steve Elliott, please contact Simon Marsh +44 (0) 20 7963 6725 or  +44 (0) 7951 389197