Philip Dunne

This article is part of the Climate project of Spinwatch.

Mr Philip Dunne is Conservative MP for Ludlow and Opposition Whip. He is also 'a senior member of the Aluminium Federation's (ALFED) All-Party Parliamentary Group for the UK Aluminium Industry'.

Advocating carbon exemptions for the aluminium industry

On 2 Feb 2010 Mr Dunne spoke in the House of Commons on the demise of the aluminium industry in the UK, particularly relating to 2 aluminium manufacturers in his constituency: 'Bridgnorth Aluminium, a rolling mill that makes aluminium flat-rolled coiled products including litho for the printing industry, and employs some 230 people; and Novelis, whose subsidiary has rolling mills in Bridgnorth and is the last aluminium foil producer in the UK'. He explains that these plants are threatened by the closure of their main supplier, the Anglesey Aluminium primary smelting plant at Holyhead, Anglesey which was closed in Sept 09.

He reveals that 'the Government tried to put in place a rescue package worth some £12 million a year for four years to subsidise energy costs', claiming that this massive package had nonetheless failed. He quotes David Bloor, managing director of Anglesey Aluminium who had 'explained to Members at a presentation in December' that;

"Anglesey Aluminium could not afford to buy power in the UK and reach a breakeven financial position. This is because the worldwide price of aluminium does not include a cost of carbon."

He goes on to criticise the government's Climate Change Levy, on which the government had recently reduced the rebate for companies in energy-intensive industries from 80 to 65 per cent from 2011. He uses Aluminium Federation figures (and mentions them explicitly, suggesting that he has links) that the aluminium industry as a whole has reduced emissions by 39% since 1990, but are being 'penalised for this success'.

These figures do not show that though technological advances have been made, emissions savings in the smelting process in recent decades have been overshadowed by considerable overall emissions increases. In fact, Alcoa predicts a 20% increase of CO2e emitted per year from ca.335 million tonnes of CO2e in 2000 to ca. 400 million tonnes in 2020. Aluminium production still accounts for ca. 1% of global greenhouse gas emissions, producing 13.1 tons of CO2 equivalent per ton of aluminium . Later in the debate fellow aluminium supporter and chair of the all-party group on the aluminium industry MP Albert Owen, revealed that 'demand for aluminium production is projected to double by 2020', meaning a huge increase in emissions from aluminium, which is the most energy intensive metal to produce.

He goes on to argue that the Climate Change Levy will make UK aluminium production uncompetitive and lead to 'carbon leakage', as energy intensive industries may re-locate to countries with lower carbon standards. Though this is a realistic risk, it is also a factor that should be accounted for by the Clean Development Mechanism which was based on the rational that it is cheaper to pay for carbon reducing technologies in the global south than here in the West. Though the Climate Change Levy may well have been a factor in Anglesey's move, there has also been a more general trend in recent years of aluminium production moving to countries with cheap energy supplies (particularly hydro based), such as Iceland, Greenland, Brazil and India. Hence the need for the previously mentioned £12 million/year subsidy from the UK government to keep aluminium production here. (see the Aluminium Federation page for more).

He concludes by saying:

'I conclude by reminding the House that the Government are failing to recognise the achievements of the aluminium industry in meeting its own carbon reduction targets. They are seeking to gold-plate these targets, raising the goalposts in excess of the EU targets; raising tax, not reducing carbon emissions; and raising those emissions through leakage overseas. Far from helping British manufacturing, the Business Secretary seems more interested in helping businesses overseas and, dare I say it, indirectly some of his friends in Russia, who have significant interests in the aluminium industry in other countries.'

The Aluminium Federation (ALFED) report this high profile debate on their website, describing the reply for Parliamentary Under-Secretary of State at the Department for Business, Innovation and Skills, Ian Lucas MP, who 'ALFED's All-Party Parliamentary Group' (All-Party Parliamentary Group for the UK Aluminium Industry) had met with earlier that week preceding the debate. The minister reportedly understood that and understood that:

'the Aluminium Industry was "an extremely important industry for the UK." It played "a key role in the manufacturing supply chain with high technology industries."'

He may be in part referring to aluminium's position as a 'strategic metal' for defense (weapons and military production), and subsequent arms trading which brings considerable cash to the British economy and even has a government department dedicated to it.

Two days later on Thursday 4 February 2010 ALFED reports that:

'a high-level ALFED delegation led by Chief Executive, Will Savage, met with the Minister of State at the Department of Business, Innovation and Skills, the Rt Hon Pat McFadden MP, to discuss major issues affecting the UK Aluminium Industry. Issues covered during the one-hour Meeting included Energy, Supply Chain, Economy/Business Environment, Legislation and the conditions under which the Aluminium Industry was operating in the UK.'

See Aluminium Federation for more.