Memorandum from the Construction Products
RECOMMENDATION TO GOVERNMENT ON ENERGY POLICY
The construction products industry is at the
heart of the UK economy, providing essential materials for our
homes, schools, hospitals, factories, offices, roads and railways
contributing 4 per cent to the UK GDP and employing over 400,000
people. It is also an energy-intensive industry. Any policy emerging
from the Review would subsequently have an impact both on the
manufacturing process and the product design.
Industry is aware of its environmental obligations,
and has made significant moves towards sustainable development.
This is evident in the development of sector sustainability strategies
and in the use of energy-efficient technologies and processes
for the manufacture of products. Of course, these are not limited
to manufacturing industries. There are a number of product innovations
within the built environment, such as thermally efficient blocks,
condensing boilers, which when utilised reduce energy consumption.
The development of environmental profiles and
environmental information on construction products provides information
that goes beyond the "factory gate". Since energy consumption
during the operational/in-use phase of a building is significantly
higher than its embodied energy, it is important to consider the
whole life performance of products and its impact at the end of
Industry recognises the Government's commitment
to reduce emissions and meet its Kyoto and national targets. The
policies introduced by government to meet these commitments however
have had an adverse affect on industry's competitiveness, especially
where businesses are operating in an increasing global market.
The climate change levy, introduced in April 2001, has raised
energy costs by an average 7 per cent per annum totalling £80
million for the construction products industry, which has already
seen significant increases in energy prices over the last few
years. In addition, manufacturers who produce energy saving products,
but do not fall within the IPPC criteria, are having to pay the
full levy, which adversely affects prices of energy saving products.
Before setting policies, government needs to
take account not only of international competitiveness, but also
national initiatives already in place by business to mitigate
their environmental impact. In doing so, it must ensure that the
policies emerging from the Review provide a level playing field
in the diversity, reliability and security of energy supply.
In particular government needs to:
1. ADOPT STRONG
We consider that the following areas are of
Competitive energy supply market
nationally and globally.
Reliable and secure energy supply.
Diverse energy sources, particularly
renewables, and incentives for its use.
No further imposition of unnecessary
Renewable resources are increasingly becoming
an alternative source of energy in industry. In particular, the
cement industry has reclaimed energy from packaging waste, waste
tyres, etc. On a European scale, other Member States have been
able to take full advantage of reclaiming energy from waste sources
and even bone meal. However, there is a restriction in use in
the UK through strict legislative requirements and through inconsistent
interpretations of waste by the regulating bodies. Based on sound
science and experience from other Member States, these barriers
can be overcome.
3. PROVIDE INCENTIVES
The climate change negotiated agreements are
estimated to reduce carbon dioxide emissions by 2.5 million tonnes
of carbon per annum by 2010, and a successful emissions trading
scheme, to be launched in April 2002, will reduce CO2
emissions by approximately 2 million tonnes of carbon per annum
by 2010. Add to this the development of energy-efficient technologies
and products, and the carbon emissions can be significantly reduced
to help UK Government meet its Kyoto and national obligations.
The use of energy-efficient products can also
optimise energy consumption effectively in both the domestic and
commercial sectors. The Review states that energy efficiency investments
can reduce energy demand by 30 per cent in the economy as a whole,
equivalent to a potential annual saving worth £12 billion,
and in the long-term forms part of an agenda for an efficient,
innovative and sustainable energy system. The Association, in
its response to government's Fuel Poverty consultation, recommended,
among other issues, the reduction in VAT on repairs and maintenance,
and on all energy-efficient products/processes. These incentives
would significantly reduce the national energy consumption.
Government can also ensure energy-efficiency
in existing buildings. Through the reintroduction of the "Homes
Bill", vendors would be responsible for ensuring the energy
use in a home meets the efficiency requirements and this would
be an increasingly important distinguishing factor in future home
4. LEAD BY
The industry is meeting strict requirements
of energy efficiency through the national Building Regulations
as well as meeting European directives, such as the Construction
Products Directive. There are a number of projects currently ongoing
that aim to reduce energy use throughout the life of a building,
eg Beddington Zero Energy Development homes. It is the first "carbon-neutral"
housing project, which boasts low energy consumption, renewable
and recycled materials among others, to provide 60 per cent reduction
in conventional energy and 90 per cent reduction in heat demand.
Government, in its own procurement policy, should adopt the best
practices highlighted in these case studies and implement an energy
efficient strategy that contributes to sustainable construction.
There is great potential for industry to contribute
to an effective energy-efficient strategy. The Association awaits
consultation on the Government's White Paper on Energy Policy
and is keen to work closely with them to develop strategies where
energy-use can be reduced through innovation and development of
energy-efficient products. This will be linked with initiatives
already in place, such as the Carbon Trust, Energy Saving Trust,
and Enhanced Capital Allowance Schemes. This needs a strong backing
from government through incentives and policy harmonisation.
We see the proposed Sustainable Energy Policy
Unit as a key role in ensuring that there is genuine co-ordinated
thinking among government issues that has not always been apparent
in the past.