Companies which have made big improvements in energy efficiency will be among those hit by the introduction of the Climate Change Levy later this year, a new report claims.
The survey says the levy, which aims to raise £1 billion, will damage competitiveness and stop firms investing in energy efficiency.
A survey for the Engineering Employers' Federation found that 2,300 companies in the UK which faced international competition would have to pay the levy in full, with "damaging implications".
Martin Temple, Director General of the EEF said: "We have never opposed the need for action on climate change, but believe the levy to be one of the most badly designed economic instruments in recent times.
"We fail to understand why the Treasury, having accepted the reliability of our data, will not accept alternative proposals which would be of greater benefit to the environment."
Nick Turner of Ernst & Young, which conducted the survey, said: "There is no doubt that the levy will penalise a number of manufacturing enterprises in the UK, particularly those who have made considerable improvements to their energy efficiency."
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