Business energy clients in the manufacturing sector could have to shell out a collective £1.2 billion by 2020 because of the government's carbon floor price policy.
This is the finding from a report by manufacturers' body the EEF, which said the Carbon Price Support Scheme is expected to cost £250 million a year when it is introduced in 2013.
Under the initiative, companies will have to pay for each tonne of carbon they produce; a penalty the EEF sees as hitting energy-intensive industries hardest.
EEF director of policy Steve Radley commented: "UK industry was already facing energy bills which made them uncompetitive before the substantial additional burden of the unilateral carbon price floor.
"We have now reached a tipping point where the cumulative burden of UK climate change policy will make it uncompetitive for some sectors to invest and create jobs in the UK."
Meanwhile, figures from the Department of Energy and Climate Change show green policies could add 22 per cent to the electricity bills of large industrial firms by 2020, before price rises are taken into account.
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