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Fears over gas rules

New regulations on carbon dioxide emissions in the UK could see plant production head overseas

LEADING materials producers are worried that strict Government regulations on carbon dioxide emissions could result in plant closures in the UK.

And a senior source at concrete, cement and aggregates giant Lafarge warned that moving production plants away from the UK was a possibility.

He said: 'Cement production creates a lot of carbon dioxide and much of Europe and particularly the UK have agreed to restrict the emissions permitted.

'If we go over the limit we have to pay heavy fines - heavier in the UK than France.

One option is to move the production to other countries, where the rules are less strict.

'Although we agree that the quantities of carbon dioxide in the atmosphere need to be reduced, we are unable to meet the UK's demands right now.'

The source suggested that possible locations for a plant included Eastern Europe.

The firm opened a £30 million plant in Serbia and Montenegro last week and a cement grinding facility in Vietnam the week before.

It has also recently opened plants in Morocco and Poland.

Under the Kyoto Protocol, the UK has a legally binding target to reduce emissions of six key greenhouse gases, including carbon dioxide, by 12.5 per cent relative to the 1990 level over the period 2008 to 2012. But Tony Blair took the UK's commitment a step further when, in April, he said that regardless of what happened internationally, the UK would reduce domestic carbon dioxide emissions by 60 per cent by 2050.

The cement industry accounts for 5 per cent of the world's total carbon dioxide emissions while Lafarge, with its 117 cement plants worldwide, produces 81 million tonnes of carbon dioxide annually - around twice the level of the whole of Switzerland. It has 10 plants in the UK, where it supplies 50 per cent of the domestic market. Lafarge itself has committed to reducing carbon dioxide emissions by 20 per cent per tonne of cement it produces by 2010.