EU steelmakers and aluminium producers may need more support from EU ETS reforms while tomato pulp and underwear producers could be getting more than necessary, according to Dutch MEP Gerben-Jan Gerbrandy.
Gerbrandy, who will co-ordinate the centrist Liberal ALDE political group’s position on post-2020 ETS proposal, outlined several areas that he thought should be the focus for amendments.
Writing in an opinion article for The Parliament magazine on Monday, he called for more ETS sectors to be forced to pay for their EUAs at auction, a more targeted distribution of the remaining free units, more even EU-wide industry compensation for indirect CO2 costs, and the need to draw in more private capital for low-carbon innovation.
The debate on the Commission’s post-2020 ETS proposal is just beginning, with the EU Parliament’s co-ordinator not expected to produce an initial report until Q2 next year, and an overall agreement not due until the end of 2016 at the earliest.
Selected views from Gerbrandy on:
EUA auctioning:
“Too many sectors are exempt from buying carbon emission allowances at auctions.”
Free allocation:
“Some of the sectors benefiting from free pollution truly require protection, to prevent (carbon leakage) … But for others, like tomato pulp and underwear producers, the exemption from paying for carbon allowances is highly questionable.”
“With an increasing scarcity of carbon allowances, we need a more targeted approach, focused on firms that truly need protection.”
Indirect CO2 costs for industry:
“European aluminium and steel producers face an uneven playing field due to different compensation schemes across the EU member states for the higher electricity costs, induced by the CO2 price.”
Leveraging innovation cash:
“The proposed ETS industrial innovation fund should be designed to better leverage the required investments … Investments in low-carbon industrial technologies, such as coke-free steel production or bio-based refining are struggling to take off.”
By Ben Garside – ben@carbon-pulse.com
