Investment in Britain’s aluminium sector is being held back by the high cost of energy, industry representatives have told a government minister.
Members of the Aluminium Federation (ALFED) warned Minister for Business and Energy, Michael Fallon, at a recent meeting in Whitehall that soaring green taxes were standing in the way of investment-led growth.
ALFED told Mr Fallon that world demand for aluminium is forecast to double from 40m tonnes per annum to 80m tonnes by 2025. If Britain and the European Union remain wedded to high taxes on energy, then manufacturers and suppliers will look to other economies in which to base production operations.
Speaking after the meeting, ALFED CEO, Will Savage, said: “We really appreciate the Minister taking the time to listen to our concerns and sincerely hope that the message we delivered will make an impact amongst the UK’s top policymakers.
,“Since 2010, Britain has lost 87% of its primary aluminium industry and this is down to the simple economics of energy prices. With some aluminium companies reporting 20% of their running costs going to energy, it’s clear that escalating green taxes are proving prohibitive to our industry. It’s no exaggeration to say that the cost of energy in countries beyond the EU can be half of what it is here.
,“It is hard to believe that the UK’s aluminium industry is prevented from taking full advantage of this huge demand for aluminium products by excessive regulatory cost burdens. But we know from talking to our members that decisions about investment are being made against Britain’s uncompetitive tax framework.”
Mr Savage added that ALFED is scheduled to meet with Mr Fallon again in six months, to give further updates on aluminium industry trends.
ALFED’s key messages to the Government were:
- The UK government should support the re-industrialisation agenda for Europe at the forthcoming European Council meeting in March, by addressing the negative impact of EU policies and by agreeing a reduction of regulatory and energy costs and other taxation which makes the European aluminium industry uncompetitive globally
- The UK government should support the British aluminium industry by cutting domestic energy taxation
The meeting with Mr Fallon comes at a ‘crucial time’, as the European Commission is currently reviewing industrial strategy and has indicated its intention to reverse the decline in manufacturing’s share of European GDP.