EU ETS: Commission urged to remove cement from carbon leakage list

Written by Martin Banks on 7 February 2017 in News
News

Green MEPs have urged the European Commission to remove the cement industry from the EU's carbon leakage list.

Cement factory, part of the Heidelberg group, Maastricht, Netherlands | Photo credit: Press Association


The sector is one of several industries, along with steel and paper that receive 100 per cent free allocation of emissions allowances, or permits, under the emissions trading scheme (ETS), the EU's flagship climate policy instrument.

On 15 February, the European Parliament will hold a crucial vote on the reform of ETS, including better management of the supply of allowances in the system.

Allowances are allocated as incentives for companies to pollute less through the ETS.


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MEPs in Strasbourg next week will vote on a report from the environment committee that seeks to remove cement from receiving free allocation.

However, the cement industry has, according to Dutch Greens MEP Bas Eickhout, been intensively lobbying MEPs in the run up to the vote, urging them to support amendments which would allow the sector to continue receiving free allocations.

Speaking at a briefing in Parliament on Tuesday, Eickhout said, "The lobbying has been intense with representatives from the sector contacting MEPs on a daily basis. The industry is, clearly, getting very nervous about the outcome of next week's vote in plenary."

He said the Greens will vote against the report if it allows the cement sector free permits.

Eickhout said it is estimated the industry could receive €1bn free permits in the 2021 to 2030 period.

He added, "Assuming an average carbon price of €20 per ton of CO2, the exclusion of cement will lead to a €20bn revenue that could be used to finance climate action."

He explained why the Greens are urging the cement sector to be excluded, saying, "Very little cement that is placed on the European market is produced outside the EU.

"It is simply too heavy and costly to transport far. The constructions sector has a very domestic nature. If there are barely any imports into the EU, then there also is no risk of carbon leakage."

He added, "Aside from this, we need to be more critical about who is getting free allowances under the ETS scheme. 

"Other heavy industries like steel and chemicals are also, like cement, on the carbons leakage list and, realistically, a case can be made out for their inclusion. The same does not apply to cement.

"Of all the big players on the list, the cement sector is the one that should not be there."

The deadline for amendments to the report MEPs will vote on is later this week and Eickhout says the outcome is still "too close to call."

Speaking at the same breakfast briefing, Swedish Greens MEP Jakop Dalunde said, "A cornerstone of the compromise reached between the different political groups in parliament is the removal of cement and clinker from receiving free allocation. 

"The cement sector is, of course, trying to ensure continuation of free allocation but it is important we keep this compromise package on the table as it is."

The ETS scheme has met with mixed success since its launch, but its work is seen as being crucial for the EU's goal, set out in the Paris climate agreement, of cutting emissions by at least 40 per cent by 2030. 

This is one reason why governments, the European Commission and Parliament are trying to work out how to reform the system for the period after 2020. 

Environment ministers are under pressure to reach agreement at a summit later this month after the Parliament holds its final vote next week on reforming the ETS.

ETS is the world's biggest scheme for trading greenhouse gas emissions allowances. It covers the energy sector, energy intensive industries and air travel which combined represent 40 per cent of Europe's total greenhouse gas production.

 

About the author

Martin Banks is a senior reporter for the Parliament Magazine

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