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UK Manufacturers Lay Out Plan for Simplified Carbon Tax Rules

EEF, a manufacturers’ organization in the UK, is calling on the government to reform its climate change policy, which is threatening the competitiveness of UK businesses, reports The Manufacturer. The group is calling the policy chaotic, overcrowded and complex.

EEF says a new single tax based on energy use would simplify the system, allow businesses to budget more easily and encourage them to invest in cleaner energy, reports The Guardian.

The EEF report, “Changing the Climate for Manufacturing,” released ahead of the Budget, shows how the Climate Change Levy (CCL), introduced ten years ago, fails in four key areas, which the group says should form the foundation of a new approach. They include:

–Incentives must be clear, reliable and transparent

–Regulation should target the right places

–Regulation must be simple and not administratively burdensome

–Measures and initiatives must take clear account of their impact on the competitiveness of businesses subject to regulation

EEF is calling for several changes including an economy-wide carbon tax that is based on energy use starting with industrial users, a review of the Carbon Trust by the National Audit Office to make it more effective and credible for manufacturers, and voluntary negotiated agreements with industry sectors that provide tax incentives for carbon intensive industry to reduce emissions.

The new policy should also consider the costs of new regulations and measures in terms of their cumulative impact on manufacturers with specific consideration given to energy-intensive manufacturers, according to the report.

The Committee on Climate Change also should conduct an assessment of carbon leakage and its possible future impact on UK manufacturing, in combination with its annual assessment of the UK’s progress towards meeting carbon budgets, and conduct a full review of the effectiveness of the Enhanced Capital Allowance scheme for low-carbon products.

The Work Foundation also says the confusion over regulation and the number of agencies and bureaucracy involved is putting job creation in a low-carbon economy at risk, reports The Guardian.

The European Union is considering two major changes to its energy tax policy: a tax based on the amount of energy content in a given volume of fuel, and a tax on carbon dioxide. Currently, energy taxes are based solely on fuel volume, not energy density.

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One thought on “UK Manufacturers Lay Out Plan for Simplified Carbon Tax Rules

  1. Good report. sadly the current UK government doesn’t “do” manufacturing filled as it is with politicos that have zero experience of manufacturing (and indeed even less interest), after all, manufacturing is where “oiks” hang out. The reduction in corporation tax (in the recent budget) in the hope that this will stimulate companies is an example of the “paint by numbers” approach used by the econmic illiterates headed by G. Osborne. Still, it makes for good entertainment. For those that think I’m unfair – well I have an advantage over many in government a) I’ve worked b) I’ve worked in manufacturing in a resonably senior position c) I’ve founded a manufacturing company.

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