The European Chemical Industry Council

No trade-off on fairness: Cefic joins industry leaders to urge fair Emissions Trading System outcome

As part of an industry ‘Alliance for a Fair EU Emissions Trading System (ETS)’, Cefic endorses the below recommendations to support the European Parliament, the Council and the Commission to ensure that their coming negotiations shape a fair ETS reform. Click here to read the statement.

The alliance of 17 energy-intensive sectors represents over 2 million EU jobs including many small- to medium-sized enterprises (SMEs). All are highly committed to the ongoing process of reducing greenhouse gas emissions, including the chemical sector which reduced greenhouse gas intensity by over 77% since 1990 and is empowering its own and other sectors to continue to slash emissions through innovating new clean products and technologies. Incentivising sustainable innovation in Europe through a fair ETS reform will help make sure the world’s 2nd largest trading bloc maintains its reputation as a climate change global leader.

The Alliance therefore encourages trilogue negotiators to ensure industry competitiveness is placed at the core of the ETS reform. The reformed ETS should include:

  • Enough allowances are available to industries exposed to carbon leakage at the level of their benchmark so as to offset additional direct and indirect costs resulting from a reformed ETS. We support the Parliament proposal to reduce the auctioning share by 5% maximum, should the cross-sectional correction factor (CSCF) be invoked. Even with this adaptation, 95% of installations would still have to buy allowances representing a significant industry investment.
  • No discrimination between EU energy-intensive sectors: Negotiators must reject any approach which discriminates between sectors exposed to carbon leakage risk, through the tiered CSCF in the event that the 5% reduction proposed by Parliament is insufficient.
  • A strong clean energy innovation fund: Finance the innovation fund from the auctioning share, as proposed by the EU Parliament.