Only limited action to mitigate soaring costs of energy and climate change regulation
Greater relief needed to offset increasing Carbon Price Floor impact
Karl-Ulrich Köhler, MD & CEO of Tata Steel’s European operations, has reacted to the third Coalition Budget presented today by the Chancellor of the Exchequer.
“There were aspects of the Chancellor’s Budget today that are welcome, such as the move to ease the administrative costs associated with the overly complex Climate Reduction Commitment.
“We are also encouraged by plans to invest in the North Sea oil and gas sector and in rail infrastructure in the northwest of England – projects in which UK manufacturers such as Tata Steel can play a major part.
“The Chancellor is rightly aiming to reward work, but this Budget did little to ease the additional unilateral energy costs that UK industry must bear. The benefits to industry pale into insignificance against the costs imposed on them from existing energy and climate change regulations, which are rising alarmingly in the UK.
“We have consistently warned about the damage that the unilateral imposition of the Carbon Price Floor will inflict on the competitiveness of UK manufacturers.
“The government’s announcement today that the carbon price support rates will rise by a third to almost £10 in 2014-15 shows clearly how much this measure will add to the costs of industry in the UK compared with the rest of Europe. Greater mitigation will be required in the government’s Energy Intensive Industries package if this is to be offset.
“Like other energy-intensive industrial companies in the UK, Tata Steel is already paying far more for electricity than its continental European peers. It is vital that the government takes early action to reverse the growth in this competitive gap by re-establishing a level playing field in European electricity prices.”
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About Tata Steel in Europe
The European operations of Tata Steel (formerly known as Corus) comprise Europe's second largest steel producer. With main steelmaking operations in the UK and the Netherlands, they supply steel and related services to the construction, automotive, packaging, lifting & excavating, energy & power, and other demanding markets worldwide.
Tata Steel is one of the world’s top ten steel producers. The combined group has an aggregate crude steel capacity of more than 28 million tonnes and approximately 80,000 employees across four continents.