Displaying items by tag: European Parliament

Europe: Members of the European Parliament (MEP) have adopted a resolution supporting a European Union (EU) carbon border adjustment mechanism (CBAM). If enacted by the EU then a carbon tax could be levied on certain goods imported from outside the EU that don’t meet local decarbonisation standards. MEPs stressed that it should be World Trade Organisation compatible and not be misused as a tool to enhance protectionism.

The new mechanism is intended to be part of a broader EU industrial strategy and cover all imports of products and commodities covered by the EU emissions trading scheme (ETS). MEPs add that already by 2023, and following an impact assessment, it should cover the power sector and energy-intensive industrial sectors like cement, steel, aluminium, oil refinery, paper, glass, chemicals and fertilisers, which continue to receive substantial free allocations, and still represent 94% of EU industrial emissions.

“The CBAM is a great opportunity to reconcile climate, industry, employment, resilience, sovereignty and relocation issues. We must stop being naïve and impose the same carbon price on products, whether they are produced in or outside the EU, to ensure the most polluting sectors also take part in fighting climate change and innovate towards zero carbon. This is our best chance of remaining below the 1.5°C warming limit, whilst also pushing our trading partners to be equally ambitious in order to enter the EU market,” said EU Parliament rapporteur Yannick Jadot.

The European Commission is expected to present a legislative proposal on a CBAM in the second quarter of 2021 as part of the European Green Deal as well as a proposal on how to include the revenue generated to finance part of the EU budget.

Europe: Cembureau, the European Cement Association, has announced that its ‘Cementing Europe’s Future: Building the Green Deal’ webinar will take place on 13 October 2020. The programme includes keynote speeches from association president Raoul de Parisot and German Minister of Environment, Nature Conservation and Nuclear Safety Jochen Flasbarth. Additionally, members of the European Parliament and representatives of the European Commission, LafargeHolcim, HeidelbergCement and several other companies involved in the European cement industry will speak.

Belgium: Cembureau has issued it support for the decision by the European Parliament to amend the Emissions Trading Scheme (ETS). The European cement association has welcomed the decision that its says does not ‘deliberately discriminate between sectors and to apply a fact-based approach to policymaking.’ It added that the changes would make European industry more CO₂ efficient, while maintaining its competitiveness.

Particular parts of the decision it welcomes include the inclusion of dynamic allocation, a benchmark with a minimum reduction of 0.25%, the introduction of a 5% flexible reserve in relation to the allowances available for free and those designated for auctioning and the impetus given to funding for carbon capture and use. It added that it was pleased to see that the amendments for an importer inclusion scheme, which it viewed were targeted at the cement sector, were not accepted. Finally, it reinforced its call for a ‘sector-neutral’ policy that does not differentiate between industries.

France: The European Parliament has voted to approve a proposal by the European Commission to reduce carbon credits by 2.2%/yr from 2021 in its Emissions Trading Scheme (ETS). This is an increase from the 1.74% reduction specified in existing legislation. It will also double the capacity of the 2019 market stability reserve (MSR) to absorb the excess of credits or allowances on the market.

Members of the European Parliament (MEP) want to review the so-called ‘linear reduction factor’ with the intention to raising it to 2.4% by 2024 at the earliest. In addition MEPs want to double the MSR’s capacity to mop up the excess of credits on the market. When triggered, it would absorb up to 24% of the excess of credits in each auctioning year, for the first four years. They have agreed that 800 million allowances should be removed from the MSR as of 1 January 2021. Two funds will also be set up and financed by auctioning ETS allowances. A modernisation fund will help to upgrade energy systems in lower-income member states and an innovation fund will provide financial support for renewable energy, carbon capture and storage and low-carbon innovation projects.

The draft measures were approved by 379 votes to 263, with 57 abstentions. MEPs will now enter into negotiations with the Maltese Presidency of the European Council in order to reach an agreement on the final shape of the legislation, which will then come back to Parliament.

Environmental campaign group Sandbag has complained that the new proposal fails to hold to the European Union’s (EU) emissions reduction targets by 2030 that were signed as part of the Paris Agreement in 2016.

“Unless the Council intervenes to substantially strengthen the System, the EU ETS will now become simply an accounting mechanism, leaving meaningful climate action to happen elsewhere. The fact that the carbon price is unchanged as a result of the vote, still at a paltry Euro5, speaks volumes. Without being realigned with real emissions levels in 2020, the EU ETS may well end up existing for 25 years by 2030 without giving the any substantial impetus to decarbonisation,” said Rachel Solomon Williams, Managing Director at Sandbag.

Belgium: Cembureau, the European cement association, has lobbied members of the European Parliament with its opinion that the European Union (EU) Emissions Trading Scheme (ETS) must maintain free allowances at the level of best-performers in order to achieve real emission reductions whilst maintaining a competitive industry in Europe. It expressed its views ahead of a scheduled vote in the plenary session of the Parliament in February 2017. One of its key demands was that fairness should be a key principle of policy making and that jobs in one sector are just as important as those in other sectors.

Cembureau called for the proposal to amend the EU ETS to ensure that all energy-intensive industries are on the carbon leakage list and all installations receive a free allocation based on ‘ambitious but realistic’ benchmarks, and benefit from free allocation based on actual production. It wants a sufficient number of free allocations for energy intensive industries at risk of carbon leakage to be made available, hence the auction share should not be higher than 52%. It also wants no further burden to be imposed on EU-ETS sectors. The 43% reduction objective and the 2.2% linear reduction factor for phase IV should not be further increased. Lastly, it has asked for support for innovation focus on energy intensive industries with an extension to cover the whole range of low carbon technologies including industrial carbon capture and utilisation (CCU). The Innovation Fund should be fully financed from the auctioning share.

In response to an amendment made by the Environment, Public Health and Food Safety committee (ENVI) the cement association said that it did not believe that this proposal could work. Its main concerns were: that introducing such a mechanism with a consequential loss of free allowances could create legal uncertainty and hamper further investments by the cement sector in Europe; that it would be impossible to measure the CO₂ performance of third country producers; an overall lack of clarity as to how such scheme would operate; serious concerns about World Trade Organisation (WTO) compatibility; that application to a few sectors would only lead to discrimination in the downstream market where cement competes with other building materials (steel, glass, wood, asphalt) that are not subject to such a scheme; and that the suggested scheme would lead to a competitive disadvantage for European cement producers on export markets where local cement players are not subject to similar CO₂ constraints.

Cembureau also used the opportunity to highlight some of the research projects the local sector is undertaking to improve its environmental performance, reduce CO₂ emissions and improve energy efficiency.

Belgium: Environmental campaign group Sandbag says that research it has conducted has shown that proposed tariffs can protect European Union (EU) cement from ‘dirty’ competition and reward EU companies that produce low-carbon cement. It has released its data ahead of the a vote by the European Parliament in mid-February 2017 to decide on whether to adopt a new border adjustment mechanism (BAM) proposed by the Parliament’s Environment Committee.

The non-government organisation says that a BAM would require importers of cement and clinker into the EU to surrender emissions permits corresponding to the embedded carbon in their products, in the same way that domestic EU cement manufacturers are required to do at present. At the same time, cement, would no longer receive free allocation.

Previous research carried out by Sandbag suggests that the EU Emissions Trading Scheme (ETS) has driven cement emissions higher, whilst other European and national regulations and product standards discriminate against low-carbon cement companies. Over the last decade, the EU carbon market may have delivered more than Euro4.7bn in ‘windfall’ profits to cement companies. However, Sandbag say that border taxes could set cement producers on a level playing field by harmonising incentives to reduce product emissions within the EU.

“The EU can now implement a pragmatic and politically feasible solution for boosting low-carbon cement in Europe, and ending the scandal of enormous windfall profits to cement companies. However, this isn’t simply about cement. In a world of developing carbon markets with no unified set of rules, it is necessary to account for discrepancies in order to avoid offshoring of production,” said Wilf Lytton, an analyst at Sandbag.