Business leaders warned the Government today that power prices could rise in the UK faster than elsewhere in Europe.

The CBI said the UK was the only country in the European Union planning to go beyond agreements on fighting global warming made at the Kyoto conference and said competitiveness could be hit because of the new environmental targets.

CBI deputy director general John Cridland said: "British business is already demonstrating it takes the threat of climate change very seriously.

"But it is extremely concerned that the UK is making too large a commitment if other countries do not deliver. This could damage business competitiveness in key industrial sectors, especially if electricity prices rise faster than the Government expects.

"Germany is expected to protect its electricity generation sector while the UK's will bear the brunt of the emissions reduction obligation with the extra costs passed to UK power users."

The Engineering Employers Federation said an emissions trading scheme, due to start next year, should be delayed because of lack of progress by other EU countries.

The UK had gone further than any other EU state in setting targets to reduce emissions at double that required under the Kyoto agreement, said the EEF.

Martin Temple, EEF director general, said: "Emissions trading has the potential to be a cost effective means of meeting our environmental obligations, but we need to get it right.

"While the rest of Europe drags its heels, Britain's manufacturers are going to have to run much faster to meet the UK's ambitious target.

"To move ahead without the rest of Europe on board, puts our manufacturing competitiveness in serious jeopardy."

Friday March 12, 2004