Select Committee on Environment, Transport and Regional Affairs Appendices to the Minutes of Evidence


Memorandum by the Cementitious Slag Makers Association (CC64)

CLIMATE CHANGE LEVY ELIGIBILITY FOR REBATES

  The members of our Association manufacture a product (ggbs), which is used as a replacement for cement in the construction industry. Ggbs is produced from blastfurnace slag (a by-product of steel-making). Its use as a replacement for conventional cement, reduces UK carbon dioxide emissions by some 1.5 million tonnes per year (0.4 million tonnes of carbon). The use of ggbs is increasing and today's figures are 50 per cent greater than the comparable figure for 1990 (the base date for the Kyoto Protocol). In the context of the Government's latest estimate that the levy package will save 2 million tonnes of carbon a year, the carbon savings to be achieved by encouraging the use of ggbs are very significant. This use of ggbs has other environmental advantages, eg it reduces quarrying by 2 million tonnes and landfill by 1.5 million tonnes per year.

  Ggbs manufacture is a relatively energy-intensive process where the cost of energy is well in excess of 10 per cent of the total cost of manufacture. However it is not considered polluting enough to be subject to "Integrated Pollution Prevention and Control" regulation. Because of this, the current proposals for the Levy offer rebates to the manufacturers of conventional cement but not to the manufacturers of ggbs, favouring the less environmentally-desirable of two directly competing products!

  As a result, the net effect of the levy package will be to increase the cost (per tonne) of ggbs manufacture by about 50 per cent more than the corresponding cost increase for conventional cement.

  This would be a bizarre outcome, totally contrary to the stated aim of the Levy, which is to encourage reductions in CO2 emissions. We suggest that a way needs to be found for ggbs manufacture to qualify for a rebate (or exemption), if the operation of the Levy is to be consistent with its stated aim.

Dr D D Higgins,

Director General


 
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