16:29 Wendy Morton (Conservative)

However, the ceramics industry is approaching a worrying period of uncertainty. The European Commission published its legislative proposals for the emissions trading system phase 4 in July 2015. These proposals cover the period from 2021 to 2030 and propose a target of achieving at least a 40% reduction in EU greenhouse gas emissions by 2030. The key issue for ceramics within the EU ETS proposals is carbon leakage, notably the evaluation of industries so that they are deemed either at risk or not at risk of it. Some sectors are likely to meet the proposed carbon leakage quantitative threshold, but the situation for other sectors, mainly the heavy clay industries and particularly those that produce bricks, clay roof tiles and clay pipes, is less clearcut, which is why I felt there was a need for this debate.

As part of its Ceramic EARTH campaign, the British Ceramic Confederation has used figures from the Department of Energy and Climate Change to estimate that UK heavy clay construction product manufacturers will pay more than £40 million by 2030 under this proposal, which equates to almost £1 million per year per factory on average.

I come from a business background. I believe in manufacturing. Businesses need continuity and stability to invest, innovate and thrive. As a country, we cannot decarbonise by de-industrialising and shifting our carbon emissions to another part of the world. Will the Minister look seriously at this issue? I want our industries to prosper and thrive. The ceramics industry needs competitive energy prices and the rejection of market economy status for China, but above all it needs a level playing field. That is why I am asking the Government to recognise the strategic importance of the ceramics industry and, in particular, bricks, pipes and roof tiles. I am sure that other Members will mention other products, too, and I leave that to them. We need the Government to look at today’s industries to see how they can be best be supported to thrive in tomorrow’s markets.

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17:20 The Minister for Small Business, Industry and Enterprise (Anna Soubry)

I turn to the sometimes controversial—understandably so—EU emissions trading scheme and reform. We are a strong supporter of the EU ETS as a cornerstone of EU climate and energy policy. It can help industry decarbonise in a cost-effective way in the transition to the low-carbon economy we all want, but the United Kingdom Government believe that improvements to the EU ETS in phase 4 can help it function more effectively and target carbon leakage support at those sectors at greatest risk. What we do not want is for us to be exporting jobs and importing carbon, so we have to get that absolutely right.

Turning quickly to EII compensation and what we call the 2050 road maps, the industrial energy costs in this country are higher than in other European countries. We know that we face a genuine and serious challenge in our country, but in answer to my hon. Friend the Member for North Warwickshire (Craig Tracey), who made a very good contribution, eligible ceramics companies can apply for compensation for the indirect costs of the renewables obligation and the small-scale feed-in tariffs scheme. We have been working closely with the British Ceramic Confederation and ceramics companies to help them to apply for that. We have worked closely with the sector to develop a 2050 road map to help it to reduce greenhouse gas emissions and increase its energy efficiency while remaining competitive. We all agree that we now need to see some real action to ensure that our energy costs are cheaper, in particular for the benefit of our manufacturing sector.

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