We will cut energy costs - but please give us time

by 5m Editor
13 September 2004, at 12:00am

UK - Government appears determined to step up energy reduction targets for pig producers, reports Hugh Crabtree, chairman of the NPA Climate Change Levy Advisory Group. But it may be possible to persuade it to modify this ambition, or at least to delay the increases.


National Pig Association

NPA is active on members' behalf in Brussels & Whitehall, and with processors, supermarkets & caterers - fighting for the growth and pros-perity of the UK pig industry.

Thanks to members of the climate change discount scheme who responded to a survey on this website, the industry's negotiators now have some ammunition to use in their bid to prevent Defra imposing immediate swingeing increases in the targets.

The NPA website survey attracted responses from around five percent of the scheme's 580 members. It showed that, where viable, producers are investing £300-£500 a sow place or £100-£200 a finishing place to reduce the amount of energy they use.

Hugh Crabtree has stressed to Defra that this investment will lead to sustained energy efficiencies. But results cannot be expected overnight, he warns, as the investments have to be phased according to the viability of projects as a whole.

Much of the British pig industry's building stock is nearing the end of its useful life, says the NPA advisory group. Producers consider that major refurbishment of buildings is the most viable approach in terms of sustainable production in Britain.

Energy-saving measures are being introduced as part as part of refurbishment projects, rather than in isolation. ”For instance, reinsulating a 30-year-old shed might be technically viable, but it reduces the ability to meet other demands such as standards of welfare or ammonia emissions.”

Further negotiations will take place with Defra next month before it will be known if, and by how much, the levy scheme energy-saving targets will be increased. In the meantime, the advisory group has sent a formal submission to Defra asking it to keep the existing targets, at least for the next two milestone periods, 2006 and 2008.

It argues that increasing the targets now will be seen as punishing the pig sector for its success to date, at cutting energy-use, and will result in further withdrawals from the climate change discount scheme.

The advisory group calls on Defra to publish a clear acknowledgement that ”the management and control of a biological production process is not comparable with inanimate object manufacture”.

You can see the full submission to Defra by visiting the NPA Library.

Climate change milestone approaches

The second climate change levy milestone approaches. The associated paperwork will be mailed out in a few days. Scheme members may find the following pointers from the NPA advisory group useful.

  • Achieving a sector pass in this milestone period is a worthwhile goal. Please complete and submit your returns promptly.

  • The deadline for returns is November 5. There will be no grace period this time.

  • Estimates will not be acceptable. For example, you must provide meter readings even if these are readings you have done yourself. You simply have to be able to show you have kept records.

  • Ring-fenced surpluses will now have to be formally verified to be allowable. The cost of this verification will in virtually all cases exceed the surplus value. Our advice is, don't ring-fence.

  • Currently the cost of carbon is about 34 a tonne. This price will almost certainly rise. It is well worth considering setting up a compliance account now and purchasing a few hundred tonnes of carbon as an insurance policy against losing the levy discount in future. Our advice is to do this now and buy some carbon.

  • Defra have agreed to take account of the impact of PMWS. If you believe PMWS has materially affected your facility performance use this simple calculation to adjust for it and inform the compliance manager you have done so when you make your return. Nominal output kg = actual output kg x (1- normal mortality %) / (1 - actual mortality %).

  • Calculation of your SEC is then made using your nominal rather than actual output which takes account of PMWS losses.

  • Energy costs are already rising. By keeping focussed on reducing energy waste you will be able to meet your facility target, retain the CCL discount and reduce your cost of production. Our advice is to look again carefully at using latest technologies, techniques and practise to meet targets and reduce waste and cost
Source:National Pig Association - 13th September 2004

5m Editor