The Confederation of Paper Industries (CPI) has criticised the Government’s decision to reduce the level of the Renewable Heat Incentive (RHI) under pressure from the EU.
Paper manufacturers use heat in the drying process, and were looking forward to a subsidy of 2.7p per kWh to develop energy facilities using biomass. However, this has been cut to 1.0p per kWh after the European Commission expressed concern that it was set too high.
CPI director general David Workman said: “We’ve been highly critical of Government policies increasing energy costs for UK industry to such an extent that the UK is becoming an uncompetitive location for paper manufacture. We have particular concerns over the impact of the forthcoming Carbon Price Support Taxation on our industry and urge that the impact on energy intensive industries is considered in more detail.
“However, the RHI was once scheme designed to support investment in low carbon heat generation and we welcomed the Government’s decision not to fund the scheme through a levy on fuel bills. This last minute announcement, with no warning, slashes support from the RHI for our members by two thirds.
“Department of Energy and Climate Change economists were clearly convinced that support in the region of 2.7p is required to achieve the required investment and it’s ridiculous that the European Commission should be allowed to veto a UK-only scheme developed by the UK Government.”