THE introduction of measures to penalise C0² emitters in the Budget have cast doubt over the long-term future of Northumberland’s largest private sector employer.
The measures, along with changes to European legislation, will cost Lynemouth aluminium makers’ Rio Tinto Alcan an extra £40m a year, wiping out its annual profits.
Bosses at the plant, which employs more than 600 people and contributes more than £100m to the North East economy, have hit out at the measures.
And they are now looking at running the site’s power station on wood rather than coal by the end of next year to avoid the increased penalties.
But they have yet to receive the go-ahead for the proposed conversion from parent company Rio Tinto and have expressed concerns about Lynemouth’s long-term future.
John McCabe, corporate affairs director, at Rio Tinto Alcan, said: “If we do nothing it would be very difficult to see how there could be a long-term future for the plant. We are already a high-cost operation and as such we have an unsustainable long-term future if we don’t change how we operate.
“Almost one third of all our current running costs are the result of legislation. Doing nothing is not an option and the preferred method would be to convert to biomass.”
Chancellor George Osborne announced a Carbon Floor Price (CFP) of £16 per tonne would be set from 2013 rising to £30 a tonne in 2020.
This is designed to encourage energy companies to invest into low-carbon power generation – in particular nuclear.
