Mike Farey, the managing director of Hydraulic Lias Lime (Hl2) says getting the 80% Climate Change Levy available to members of the British Lime Association (BLA) would cost him more than paying the tax.

To gain the rebate companies must join the Lime Sector Scheme administered by the BLA. In the past two years it has cost £5,000 to join the scheme, although it has come down to about £3,000 this year plus additional costs of consultancy service.

Hl2 are currently producing about 1,000 tonnes of hydraulic lime a year and burning 0.145 tonnes of coke per tonne of finished lime mortar. The Climate Change Levy will add £1.50 or so to the cost of production.

Farey says he is not going to pay BLA more than three times that amount to join their scheme. I have spoken to the DETR and put up a case that we are unique and we ought to have a submission on our own.

He added: I had been thinking of joining the BLA but I\'m buggered if I\'m going to join them now.

Charlie Battle, secretary to the British Lime Association, said the costs of the scheme reflected the costs incurred in reaching the agreement over the past two year. It\'s impossible to administer a complex negotiation agreement without costs of this order.

He also said: The scheme costs are in line with similar sectors and open to scrutiny by the DETR. The real issues here are the substantial costs being imposed on industry by the Climate Change Levy.

Farey says demand for his hydraulic lime greatly outstrips his ability to produce it and he is currently negotiating a move to freehold premises and investing £1.6million in new plant, including a new kiln from SIC in Italy, in order to push production up to ten times its current level. The new facility should be up and running by the beginning of 2003.

His lime sells for an average of £300 a tonne, although the investment planned by Hl2 in the next 18 months is intended to reduce that and give the product a price advantage over lime mortars imported from the Continent.

Farey says hydraulic lime is already a climate friendly product compared with Portland cement. Lime is burnt at a lower temperature for lime mortars than it is for cement and Farey believes there is a 30% saving on energy required in its production.

Then, when it is setting, it absorbs 300kg of CO[2] per tonne, removing some of the greenhouse gas from the atmosphere.

And, because lime mortar is not as hard as cement, it leaves building materials easier to clean and re-use, so less new material has to be produced.