The lobby group which represents the medical devices sector, which employs 26,000 people, has called on Minister for Finance Brian Cowen to reduce excise tax on energy in the Budget.

The Irish Medical Devices Association also wants the Government to establish an industry fund to encourage the efficient use of energy in an industry whose annual exports amount to some €6 billion. Association director Sharon Higgins said energy costs were significantly out of line with Ireland's competitors for multinational investment. "The Government has a responsibility to act quickly and decisively to minimise the negative impact of rising energy costs," she said.

"Budget 2007 is the vehicle to make the necessary fiscal adjustments for Irish business. The scope, extent and impact of rising energy costs is undermining Ireland's cost base and eroding business confidence. This requires an immediate and comprehensive response, including reductions in excise duty and the creation of an industry fund to promote energy efficiency."

Ms Higgins said the Government should adopt a four-strand approach to the "energy crisis": reward companies that invest in and improve energy efficiency;bring the cost of energy into line with international competitors;promote real competition in the energy market by encouraging new supplier entrants; and foster new indigenous energy sources.

"A recent medical devices industry survey shows that energy costs represent a very high percentage of variable overhead costs. Many companies are seeing the cost of their energy bill soar by over 30 per cent. Further projected increases over the coming months are alarming and make it very difficult for companies in the sector to budget."