The levy, scheduled to take effect in April 2001, is 0.43 pence per kilowatt for electricity and 0.15 pence per kilowatt for liquid fuel or natural gas. There will be exemptions to the levy--such as the electrolysis in primary aluminum production--and industries can reduce the levy by up to 80 percent by setting themselves certain targets.

The aluminum industry's target is a reduction of energy consumption by 20 percent compared with, 1999 within 10 years, according to an Alufed spokesman, but rolling and extrusions operations would not be eligible for the exemption.

Alufeds president, Paul Rata of British Alcan Aluminium Plc, attacked the British government for taking the European Union's Integrated Pollution Prevention and Control Directive (IPPC) as a basis for eligibility. "The chosen IPPC definition actually omits to mention some parts of the aluminum industry's processes while including those in competitive industries, raising a serious competition issue," he said.

Rata noted that the hot rolling of steel was included but the hot rolling of nonferrous metals was not, although the potential for pollution was equal. "As things now stand, if you were to buy a can of Coke in a steel can the levy on the material would be 20 percent of the tax, while for the aluminum can the levy would be 100 percent of the tax. This is nonsense," he said.