Brussels, 2 March 2017 – In reaction to EU Council’s Emissions Trading System (ETS) negotiations this week, Cefic calls on the European Parliament to safeguard industry’s ability to invest and innovate, and provide their part of the EU innovation fund.
States Marco Mensink, Cefic Director-General:
“We recognise the hard work of the Maltese Presidency in bringing talks to a conclusion. A quick turnaround in the trialogue seems possible, giving more time to discuss complex but important implementation aspects. We thank Environment Ministers for rejecting the discriminatory tiered approach, which would have especially had a detrimental impact on the crackers in the petrochemical industry. These are the foundation of entire EU value chains.
We understand why Environment Ministers focused on shaping ETS into a better functioning system, which is paramount for industry and mitigating climate change. Europe’s chemical industry will continue investing in innovation for climate change mitigation including energy efficiency, energy storage and other high technology that will cost billions of Euros if we are to shift Europe to a global low-carbon leader. However, Cefic asks as soon as possible to assess the impact of the unprecedented withdrawal rate now proposed on the future carbon price. Never before in the ETS debate has such a cancellation of credits been proposed.
Most important is to expand the auctioning volume flexibility. Shortage of emission rights between 2021 and 2030 could be best avoided by expanding the auctioning volume flexibility beyond 2% and meeting the proposal of the Parliament for 5%. This would act as a strong incentive for industry innovation.
Cefic asks the EU Parliament during the trialogue negotiations to make sure that the Member States do their part to support investment in innovation, and therefore fund it by drawing on auction share rather than from free allocation reserves. They should even increase the fund, as proposed by Parliament."
For best success, the following steps will also enhance the strength and functioning of ETS:
- Update benchmarks: To respect and reward good performance, benchmarks should be based on the most recent data on how companies are reducing emissions through their investment in improved technology and efficiency
- Enable indirect carbon cost compensation: Enabling full compensation would avert the risk to exposed industries competing on a global market
- Reduce the threshold for allocation updates: More flexible allocation can be enabled by reducing the threshold for allocation updates. While Council proposes 15%, Parliament offers 10% production changes as a trigger threshold
Contact: Dervla Gleeson, Cefic Media Relations Manager (email@example.com / +32.(0)2.676.72.89)