The Aluminium Federation (ALFED) said the government’s decision to cut the CCL allowance for companies in the UK’s Climate Change Agreement from the current 80% to 65% will cost its members an additional £4M/y.

The UK Government had previously offered tax relief of 80% on the levy imposed upon industry if companies invested in energy-saving equipment and processes.

Alfed chief executive Will Savage said member companies could not afford the extra costs when they were struggling to compete with major competition from countries such as China and India, where they do not have climate change agreements.

He said: “It is a nonsense from an environmental or economic point of view to come out with a u-turn on an energy-saving scheme.”