APPENDIX 2
Memorandum submitted by the British Cement
Association
EXECUTIVE SUMMARY
1. The UK Government has received international
acclaim for its pioneering policies to tackle climate change.
The BCA welcomes the introduction of forward-looking approaches
to environmental and other measures, but believes that there are
important lessons to be learned from the experience to date in
a number of areas.
2. The UK Chair of the G8 and Presidency
of the EU provides a timely opportunity to ensure rigour in EU
implementation of climate change policies, and to explore opportunities
for global trading mechanisms.
3. The EU ETS is not alone as an emissions
trading mechanism for greenhouse gases, and other schemes are
being developed outside of Europe. It would be a positive step
if the UK Government could work towards true international schemes
and markets, especially as the EU starts to consider additional
greenhouse gases within its trading scheme.
4. As Chair of the G8 the UK could explore
the possibility of a role for the World Trade Organisation in
this respect.
5. Any future "cap and trade mechanism",
either at EU or international level, should have much simpler
mechanisms than those developed for the National Allocation Plan
as part of the EU ETS.
6. With the European emissions trading scheme
becoming effective in January 2005, and other trading schemes
in prospect, in the interests of business efficiency the United
Kingdom should terminate its domestic climate change levy and
emissions trading schemes at the earliest opportunity.
THE IMPACT
OF CLIMATE
CHANGE MEASURES
ON THE
UK CEMENT INDUSTRY
1. The UK Cement Industry
The British Cement Association is the trade
and research organisation that represents the interests of the
United Kingdom's cement industry in its relations with Her Majesty's
Government, the European Union and relevant organisations in the
United Kingdom. The members of the BCA (Buxton Lime Industries,
Castle Cement, Lafarge Cement UK and Rugby Cement) are the major
domestic manufacturers of Portland cement producing over 90% of
the cement sold in the UK.
2. Energy represents approximately 35% of
the variable cost of cement manufacture and it is therefore a
primary concern of the industry to take all cost effective measures
to improve energy efficiency and thereby reduce its emissions
of carbon dioxide.
3. The cement industry supports the principle
of emissions trading. Through their parent companies, Lafarge
Cement UK, Castle Cement, and Rugby Cement are committed to carbon
dioxide reductions through the World Business Council for Sustainable
Development Cement Sustainability Initiative, (WBCSD CSI). In
addition, Buxton Lime Industries has undertaken to adopt the commitments
within the WBCSD CSI.
4. One of the BCA's members, Lafarge Cement
UK, is a direct participant in the UK Emissions Trading scheme.
Other members have experience of trading carbon through their
membership of the Climate Change Levy Scheme.
5. The industry is one of the sectors prescribed
for mandatory inclusion in the EU ETS, either from its initial
implementation in January 2005, or from January 2008 under the
"opt out" provisions.
6. In the UK, BCA and its member companies
have been working with Defra, Dti, and their consultants in relation
to the development of the EU ETS and its implementation within
the United Kingdom.
7. At the European level, BCA has been working
with other European cement manufacturers, through its EU level
trade body CEMBUREAU. In addition to the development of common
issues, CEMBUREAU is in direct communication with the European
Commission.
UK CHAIR OF
G8 AND PRESIDENCY
OF THE
EUROPEAN COUNCIL
8. The ratification of the Kyoto protocol
by Russia ensures that the Protocol will come into force in 2005.
This raises the importance of greenhouse gas emissions trading
and related mechanisms, and brings the possibility of a global
scheme closer.
9. Simultaneously holding the Chair of both
the G8 and the EU provides a timely opportunity for the UK Government
to champion and coordinate its environmental policies. BCA notes
that the Prime Minister has already indicated his Government's
intention to do so.
10. The EU ETS is not alone as an emissions
trading mechanism, and other schemes are being developed outside
of Europe. It would be a positive step if the UK Government could
work towards true international schemes and markets, especially
as the EU starts to consider the other greenhouse gases, (GHGs).
11. Any future proposals from the UK, EU
or others in the international community should be market-based
and compatible.
12. The UK could use its position in the
chair of the EU and G8 to explore the possibility of a role for
the World Trade Organisation to ensure the cost of tackling climate
change is spread between those products manufactured within and
outside of the European Union.
13. It is important that any future international
cap and trade mechanism for carbon dioxide or the other GHGs should
have much simpler mechanisms than those developed for the National
Allocation Plan as part of the EU ETS.
14. The UK Government has received international
acclaim for its pioneering policies to tackle climate change.
The BCA welcomes the introduction of forward-looking approaches
to environmental and other measures, but believes that there are
important lessons to be learned from the experience to date in
a number of areas:
14.1. Adoption of realistic timetables for
development of any reduction scheme and introduction of appropriate
measures by the parties concerned;
14.2. Provision of adequate level of certainty
to assist industry and others concerned to make the necessary
commercial decisions;
14.3. Clear unambiguous and enforceable
targets with simple mechanisms for any compliance system;
14.4. Ensuring equitable targets from all
participants in any given scheme, ie no discrepancies such as
in the National Allocation Plans of many other Member States.
ALTERNATIVES
15. The Joint Implementation and Clean Development
Mechanism (JI & CDM) are important components of the EU ETS
and BCA hopes that the UK will use its time in the Chair of the
EU and G8 to promote and foster their use.
16. Although the European Kyoto target is
eight per cent, and the UK's contribution is set at 12.5%, the
UK Government has set its own goal of 20% by 2010, with a commitment
to implement the recommendation of the Royal Commission on Environmental
Pollution's longer term 60% reduction by 2050.
17. These ambitions, although environmentally
laudable, fail to take into consideration the way in which they
may be achieved or the impact on European or international competitiveness.
18. In implementing any future EU-wide or
global trading mechanism for carbon dioxide or the other GHGs
it is vital that there is parity amongst EU countries or internationally.
The UK Government should seek to implement the UK's contribution
in an equitable way, which does not have a detrimental impact
upon the competitiveness of domestic industry.
INDIVIDUAL UK GOVERNMENT
DEPARTMENTS
19. Defra, Dti, ODPM and HM Treasury have
all contributed to the development and implementation of Climate
Change measures. Co-ordination between them, let alone the implementation
of holistic and complimentary policies has proved elusive to date.
20. A clear understanding needs to be established
by these departments between climate change policy, environmental
taxation, waste policy, construction and building regulations.
21. A coherent UK international policy seems
a remote possibility while there is a clear lack of "joined-up"
policy within the UK.
5 November 2004
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