The CHEMICAL Industries Association has defended the government’s sector-based approach to energy tax rebates, following criticism from an environmental law expert.
Dr David Gordon, associate partner and environmental law specialist at law firm Eversheds, said sector-wide agreements would help some firms in the same sector more than others, as companies’ energy usage varies significantly. `This could impede competition and reduce the effectiveness of the tax,’ he added.
But CIA director-general Dr Elliot Finer said Gordon’s comments were strange. `A sectoral efficiency agreement is a far more effective way to achieve improvements than by relying on the tax alone,’ he said.
The chemicals industry is subject to an 80% rebate. But while fertiliser makers spend around 8% of their annual turnover on energy, the bill for soap makers could be ten times smaller.
While a European pollution prevention directive will determine what sort of businesses qualify for lower energy tax, there are no plans to differentiate between companies within sectors, Gordon argued.
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