The Government should use the next budget to encourage investment in new energy-efficient technology in order to avoid further job losses in the manufacturing sector, according to Plastics Ireland.

The group, part of the Irish Business and Employers' Confederation (Ibec), said the introduction of electrical injection moulding machines in the plastics industry could slash the sector's energy consumption by two-thirds and drastically reduce the amount of carbon credits the Government must buy to meet its Kyoto treaty commitments.

A report by Plastics Ireland estimates that the machines would cut the Republic 's annual electricity consumption by the equivalent of 76,000 tonnes of CO2emissions.

The State must cut its CO2 emissions by 7 million tonnes a year from 2008 to 2012 to meet its Kyoto pledge, the Minister for the Environment and Local Government, Dick Roche, said last week.

Plastics Ireland called on the Government to follow the example of the British government and offer tax incentives to companies who invest in the energy-saving equipment.

Gerry Farrell, director of Plastics Ireland, said the Government needed to take a lead in promoting energy efficiency instead of waiting around in the hope that gas and oil prices would fall.

"High energy costs are putting jobs at risk now and leaving Irish companies unable to compete internationally," he said.