Aluminium plant warns of Kyoto threat to jobs

A crackdown on industrial pollution threatens the survival of the Republic's only major aluminium factory - and the livelihoods of its 700 workers - an Oireachtas committee has been warned.

The Swiss parent group of Aughinish Alumina is likely to cancel a key 200 million investment programme should the Co Limerick company be forced to cut greenhouse gas emissions in line with the Kyoto Protocol, senior managers said.

The inevitable consequence would be the "closure by degrees" of Aughinish, they told the Joint Committee on the Environment and Local Government.

Irish emissions are running 18 per cent above Kyoto targets. The Republic risks a 1.2 billion EU fine should it fail to rectify the situation by 2012.

Urging the Minister for the Environment and Local Government, Mr Cullen, to grant Aughinish an exemption, managing director Mr Damien Clancy said the company will struggle if it is required to abide by Kyoto.

"The future of Aughinish is at stake. We see a major threat to the viability of our company - and that threat is an inflexible implementation of the various EU directives within the \ national climate change strategy," he said.

But Mr Cullen was adamant last night that the Republic cannot shirk from its Kyoto obligations.

"Doing nothing is not an option. There is no get-out-of-jail card. The cost of not complying with the target set for Ireland will hit all taxpayers hard," the Minister said in a statement.

"This is about changing ways. Working with industry, this is achievable. We must move away from the bad practices of the past of burning dirty fuel to cleaner forms of energy."

A spokesman said the Minister was committed to helping industry overcome obstacles and to explore alternative energy sources, such as wind power.

Aughinish claims its case is unique as it trades in an international commodity and is vying with competitors not constrained by Kyoto. Some 87 per cent of rivals are located in jurisdictions not materially affected by the protocol, Mr Clancy told the committee yesterday.

Even those within Kyoto signatory states are likely to be granted waivers by their governments, he said. Germany has indicated its largest aluminium plant will be allowed to exceed emission targets. EU member-states can grant limited exemptions to Kyoto treaty.

Aughinish's energy requirements are considerable: it consumes 40 megawatts of electricity annually, equivalent of half the output of nearby Ardnacrusha hydroelectric station. It is the largest national industrial consumer of heavy fuel oil and spends more than €65 million a year on energy.