Energy-intensive industrial users to warn UK ministers of gas rationing

Some of Britain’s biggest industrial users of energy will warn ministers on Wednesday that parts of industry risk shutting down this winter if there is a severe shortage of gas and emergency measures to limit use are introduced .

The Energy Intensive Users Group, which represents the UK’s biggest consumers of industrial energy, such as glass and steel, said many of its members could be forced to stop production if rationing of gas was introduced.

A continuous gas supply is essential for many energy-intensive processes, including the manufacture of glass and ceramics.

The warnings came as climate campaigners separately threatened the UK government with legal action over a recent consultation over Chancellor Rishi Sunak’s one-off 25% tax on the profits of oil and gas producers.

Heavy industry representatives will meet Business Secretary Kwasi Kwarteng on Wednesday to discuss the impact of the government’s contingency plans, in what one executive described as “the beginnings of sensible planning”.

“Glass is one of the most exposed [sectors] because it is a continuous process highly dependent on the gas. We might only survive a few hours, maybe more than a day, but it wouldn’t be two days,” said Dave Dalton, EIUG chairman and chief executive of trade body British Glass.

Ministers have so far played down worries about Britain’s energy supply this winter, even as continental European countries have urged households and industry to cut consumption in case Russia cuts its gas exports to the continent.

But British analysts are worried about what would happen in a particularly cold winter, given that it has relied on supplies from Europe during events such as the ‘Beast from the East’ cold snap. ” of 2018.

“The view is that in the current situation there are unlikely to be any gas shortages, but as we move into winter that could change,” Dalton added. The industry was looking for “a little more honesty” from the commercial department “about where they are in terms of making arrangements [on gas rationing]”.

Rob Flello, chief executive of the British Ceramic Confederation, said that given the industry’s need for a continuous supply of gas, “rapid or short-notice shutdown carries the risk of significant damage to the kiln”. “Robust contingency plans” were needed to ensure any shutdowns could be handled in a coordinated fashion, Flello added.

Other sectors could more easily halt their processes, but one industry executive warned that it would still be “economically damaging to run things on a stop-start basis”.

Tata Steel, which operates two blast furnaces in Port Talbot, South Wales, said “any sudden or significant shortages in natural gas or electricity supply are likely to impact our operations in the UK. United”, while stressing that it had “solid operational plans”. in place to ensure safety.

The Chemical Industries Association said closing its members’ facilities was a “complex process”.

A government official insisted ministers did not expect gas rationing this winter. He said under Britain’s gas contingency plan, rationing was based on an ‘extreme’ and ‘extremely unlikely’ scenario in which Russia cut off all gas supplies to Europe and then Norway also cut supplies to the UK.

Separately, climate campaign group Uplift has warned the government it is prepared to seek a judicial review of what it claims is an ‘unfair and unlawful’ seven-day consultation on the bill that underpins the Chancellor’s new energy profit tax on oil and gas profits.

Uplift opposes a new investment allowance introduced alongside the tax, which means oil and gas companies will benefit from an overall tax saving of 91p for every pound invested in increasing production in the British waters.

The group says the allocation “appears to be a new subsidy for the fossil fuel industry” and that the short consultation period was “totally insufficient” to consider “complex changes with such far-reaching consequences”.

HM Revenue & Customs said it ‘cannot comment on potential or ongoing litigation’.