Products firms left in dark over ETS opt-out

The European Commission’s decision last week to allow UK firms to opt out of the Emissions Trading Scheme (ETS) has sent shivers of doubt through the construction products industry.

A Department for Environ-mental, Food and Rural Affairs (DEFRA) spokesman told CJ the 300 UK firms that applied for the opt-out before the deadline of 4 March will be granted an opt-out until 2008.

The Commission’s decision came after the government announced carbon allocations for manufacturers under the ETS last month. The introduction of the ETS has left manufacturers unsure whether to meet environmental targets through the scheme, or through the existing Climate Change Levy (CCL).

One ceramics manufacturer, who asked not to be named, told CJ: “We’re trying to do the best we can with less than perfect information. We’re trying to guess what the right answers will be. We don’t know if we’re in two schemes or one – it could be ETS, or the Climate Change Agreement, or both.”

However, the government has admitted it got allocations wrong, and the source also voiced grave doubts over the existing CCL. He said the government is reviewing the CCL programme, after a consultation launched in December. The source said it could be dangerous to follow the CCL guidelines on reducing emissions.

He added: “The national allocation plan is so riddled with mistakes and errors that no one can take it at face value.”

Should the errors in the CCL prove too great for it to be workable, the source said it would be nearly impossible to switch from it straight to the ETS.

The ETS focuses on CO2 emissions at specific factories, whereas the CCL looks at CO2 generated by electricity consumption across an entire company.

The source said: “It would put us through an unbelievable amount of work.”

York Handmade managing director David Armitage said: “One has to welcome energy savings in a firm like this, but it’s been tremendously time-consuming setting up the monitoring and reporting mechanism.”

• CJ understands that the government is reviewing last month’s allocations. Castle Cement last week welcomed its allocations, but criticised DEFRA for ignoring energy efficiency improvements to its Padeswood kiln. However, Lafarge Cement was allocated carbon credits amounting to roughly half its carbon output, meaning the firm will probably have to buy credits on the open market.