Business association IETA is urging the European Commission to reveal which sectors are likely to receive free EUAs under post-2020 rules and how many emissions those groups represent.

The Commission’s July 15 proposal for the EU ETS Phase 4 (2021-2030) includes a new way of dividing up those free allowances, aiming to target free allocation to those companies at a more acute risk of carbon leakage, and to reward the cleanest performers by giving them everything they need to comply.

As part of its preliminary response to the proposal, IETA said an indication of the sectors that will benefit “would be extremely helpful for IETA members as they try to understand the impacts of the proposed rules.”

“Whilst we understand that this data cannot be confirmed until after 2017 … it would be useful to get an estimate, based on the most recent production data (2014 for instance),” the group added.

Industrial sectors will not know for sure if they are on the carbon leakage list until the Commission finalises it in 2019, using data from 2013-2017.

Another update will be made five years later.

When the proposal was tabled, Europe’s climate commissioner Miguel Arias Canete said the new allocation rules should mean only around 50 industrial sectors will be deemed vulnerable enough of carbon leakage to get 100% of their best performers’ requirement, slashing the number from 177 in the current trading phase.

“You can imagine that traditional sectors like steel, chemicals and aluminium will be there (on the list),” he said.

Read Carbon Pulse’s analysis for further details on the proposed free allocation process

By Ben Garside – ben@carbon-pulse.com

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