British Glass calls for government support in face of energy crisis
In an open letter, the UK glass industry is repeating its calls for the UK Government to support manufacturers against spiralling energy costs, following a ‘complete lack of action’ from ministers, leaving businesses vulnerable.
British Glass states that manufacturers saw their gas and energy prices ‘quadruple and triple, respectively’ in 2021, with Carbon Compliance costs increasing from lows of £16 in 2020 to a high point of over £80 per allowance in 2021.
The group warns that the rapid increase in energy prices will result in production costs ‘soon outstripping the product value’, with UK companies put at a further disadvantage as they are ‘paying more for their energy than those in the EU’.
As costs are passed on, British Glass says, this is continuing to put pressure on the glass supply chain, which it says will ‘ultimately impact the consumer’ due to the rising costs associated with glass products such as food and drink packaging, and glazing.
According to the group, this could see popular consumer products, such as UK-produced jams, pasta sauces, beers and spirits becoming too expensive, leading to an increase in imports from EU countries, Turkey, Oman, Egypt, and Russia in the long-term, where energy and carbon costs are significantly lower than the UK.
British Glass further warns of the risk that spiralling energy costs present to decarbonisation, inward investment, and UK jobs in deprived areas, if ‘immediate action is not taken’.
British Glass CEO Dave Dalton said: “Government is failing to grasp the severity of the issue. There is a considerable threat to the glass sector that will lead to a lack of inward investment, a loss of employment in some of the most deprived areas of Northern England and missed decarbonisation targets with an added increase of imports from countries where there is little or no control over carbon emissions, leading to a net increase of CO2.
“Despite assurances from the Secretary of State, there has been nothing done to support manufacturers through this crisis and coupled with the disparity between carbon prices in the UK and the EU putting UK manufacturers at a competitive disadvantage, there is a very real possibility that businesses will no longer be competitive if the lack of support from government continues.
“We are not asking for a bailout using taxpayers’ money. We are simply asking for policy to support the longevity of the industry and create a level playing field for UK manufacturers alongside international competitors. If this does not happen companies will be forced to pass on the costs to customers and consumers further fueling inflation and the cost of living.
“Manufacturers cannot continue to cover these costs or attempt to pass them onto customers and also be expected to meet climate targets, maintain much needed jobs in underprivileged areas of the country and still be a key contributor to the UK economy.
“Further delay will be detrimental to our sector, and we are calling on government to open an immediate dialogue and take real action now.”
The rising price of glass remelt PRNs is placing the industry under further pressure, with the value of the PRNs jumping from £9.75 to £190 between December 2020 and 2021. The Government has stated that it will not take action to intervene, but will ‘continue to monitor’ the situation.