On Tuesday evening I had dinner with representatives of the Engineering industry. The Chairman of the EEF made an impassioned speech about the damage dear energy prices are doing to UK industr. He explained just how high the energy bill of a UK steel producer is compared to the bills of equivalent producers in the USA. He told us that there are periods of some winter days when penalty tariffs come in, making it necessary to close a plant. I agree with him that this is a big problem for the Uk , given its sensible wish to create more industrial activity here.
The EU thinks it knows what you like – dear energy. Their latest plans for new carbon dioxide targets entail cutting CO2 emissions by 60% compared to 1990 by 2030. 27% of the electricity must be generated from renewables as part of their preferred method of hmitting this new target.
It is true that this time they are not imposing individual targets on individual states, unlike our current demanding targets. However, I assume we must take these new targets seriously. They mean a further substantial rise in EU energy prices.
I assume the EU expects success partly because this policy must cause substantial furtehr de industrialisation in the EU. Given the much higher energy prices this implies compared to the USA’s cheap gas or China’s coal, they must be factoring in a furtehr large transfer of industrial activity outside the EU.
It would have been better if their new targets had been CO2 emissions needed to produce what we consume, rather than the CO2 taken for what we produce. Importing energy intensive products will not help the overall world csamapign againstg CO2, though it will leave us poorer and the parts of the world making things richer.
Let us hope the UK can get on with its own shale revolution, and discover enough cheaper gas to give us a chance. The US is both cutting its CO2 and providing plenty of cheaper power for an industrial revival. We need to follow that example. One of the ironies on Tuesday night was to hear businesses who rightly complain about the cost of UK energy at the same time defend our current memebrship of the EU, without apparently understanding the importance of EU decisiosn to the UK’s dear energy.