THE leader of the UK's largest business organisation has called for the overhaul of green tax schemes that could jepordise the future of key North-East industries such as chemicals and steel.

CBI director general John Cridland told business leaders that new green taxes, including carbon floor pricing (cfp), put too much pressure on energy intensive sectors.

And he said the carbon reduction commitment, which aims to drastically cut firms emissions by 2020, should be axed in its present form, as rather than encouraging green behaviour it was "just a cost" for industry to absorb.

Mr Cridland's criticism comes less than two weeks after independent think tank Civitas claimed the North-East could suffer mass unemployment as a result of Government plans to cut CO2 emissions at nearly twice the rate of any other EU nation by the end of the decade.

Civitas said that green taxes, including the new cfp, to be introduced in April 2013, will see the average energy-intensive company's energy bill rise to £17.5m by 2020 from the current £3m, driving firms abroad.

The cfp, announced in the March budget, will introduce a minimum price for carbon of 16 per tonne, which will rise to 30 by 2020.

Announcing 390 potential job cuts from its 1,800-strong North-East workforce last month, Tata Steel Europe's chief executive Dr Karl-Ulrich Kohler partly blamed imminent carbon legislation for putting additional pressure on the business.

Yesterday Mr Cridland pointed out that Ineos had said a chlorine plant in Cheshire could become uneconomical with its introduction.

He said: "Tata steel is facing the same problem. One major construction company is now finding it will soon cost less to import its cement from Spain than to produce it at its UK plant.

"Yet Tata makes the steel that goes into the turbines. Ineos makes the lubrication that helps the blades turn. And we need up to 150 tonnes of cement to generate every megawatt of offshore wind."

Addressing his first CBI energy conference as director general, Mr Cridland said cfp risks tipping energy-intensive industries over the edge.

He said: "We have to see exemptions for those industries most at risk - those very industries that a critical part of our low-carbon economy. Therefore, we propose a rebate-based exemption linked to the energy intensive industries' work on energy efficiency."

He added: "At a time when rebalancing of the economy needs UK manufacturing to be playing a bigger role, energy-intensive industrial users need more help, but the Budget unilaterally increased their cost base."

Mr Cridland said the CBI was not going soft on the deficit and accepted it must be reduced.

"But when the Government proposes tax measures that are counter-productive, and that hold back investment and growth, we reserve our right to say so," he added.