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Today’s vote in the European Parliament marks a major stepping stone for the ETS review.
“This message reads loud and clear:
NO to a tiered approach on carbon leakage and YES to a dynamic and predictable benchmark’s reduction”
says Nicola Rega, Climate Change and Energy Director representing the Confederation of European Paper Industries (CEPI).
The proposed flexibility in setting the auction share together with proposed solutions to help member states with compensation for indirect carbon costs and the wider-ranging fund for innovation are also welcomed by our industry.
We recognise the efforts made towards reaching a broad political agreement embracing almost all the political groups. This is a very positive signal as it demonstrates the strong consensus behind this vote. We fully congratulate the rapporteur, Frederik Federley and shadow rapporteurs Esther de Lange, Edouard Martin and Hans-Olaf Henkel for their commitment to achieving a common position.
Although these are positive developments, more work needs to be done to address the text’s shortcomings, particularly on benchmarks, the impact of the cross-sectoral correction factor and on effective compensation for indirect costs across Europe.
A significant investment challenge lies ahead for European manufacturing industry to transform its production base and regain competitiveness. We will constructively engage with policy-makers to ensure industry’s viability and that the ETS rewards low-carbon investments. We urge the ENVI Committee to seize the opportunity to build upon ITRE’s lead and to put the ETS on a pro-investment track.
For more information, please contact Nicola Rega at email@example.com or by mobile: (+32) 26274918
Note to the Editor
CEPI aisbl - The Confederation of European Paper Industries
The Confederation of European Paper Industries (CEPI) is a Brussels-based non-profit organisation regrouping the European pulp and paper industry and championing the industry’s achievements and the benefits of its products. Through its 18 member countries (17 European Union members plus Norway) CEPI represents some 505 pulp, paper and board producing companies across Europe, ranging from small and medium sized companies to multi-nationals, and 920 paper mills. Together they represent 23% of world production.
Tiered approach impacts seriously the majority of energy-intensive industries in the EU and their associated value chains
We, the signatories of this paper, energy-intensive sectors representing about 2 million jobs in the EU and comprising many SME’s, are under direct impact of the EU ETS and are deemed exposed to carbon, investment and employment leakage.
We urge Members of the European Parliament to acknowledge the importance of our sectors for the EU economy, in particular for European jobs, and all their economic value chains by rejecting any “tiered approach” to free allocation and voting against it.
We strongly oppose any “tiered approach1” and continue to advocate for full (100%) free allocation up to emissions efficiency benchmark levels for all sectors.
We maintain that:
- The tiered approach would reserve free allowances for some sectors at the expense of others. It would go against the principle set in the October European Council Conclusions that best performing companies in the ETS carbon leakage sectors should not bear additional carbon costs. Fairness should be a key principle of policy making. Jobs in one sector are neither more nor less important than those in other sectors.
- The proposed tiering has no economic logic. It is based on flawed assumptions that the European industrial sectors could pass on costs without losing market shares and lacks any cost comparison between a given European and a non-European sector.
- Nor does it have proven environmental logic. It would not deliver decarbonisation through investment and innovation but rather drag those investments outside Europe. In fact, the tiered approach punishes a sector investing in carbon emission reductions by giving a lower protection against the risk of carbon leakage as a direct consequence of these investments.
- Moreover, it could well prove to have been unnecessary to prevent a Cross Sectoral Correction factor (CSCF). Many analysts’ reports, including the Commission’s Impact Assessment, predict that there will be sufficient allowances available to ensure full free allocation at the benchmark levels and there is no grounds for referring to discriminatory instruments.
Our industries have made several alternative proposals to tiering, which include a lower auctioning share (52% instead of 57%), the application of a dynamic allocation and a fully flexible reserve for growth that would deliver full and effective carbon leakage protection without the need for arbitrary discrimination.
In conclusion, we ask you to create a framework that gives all sectors an equal opportunity to thrive in Europe and not to pick and choose which sectors stay in Europe.
1. Cefic - European Chemical Industry Council
2. Cembureau – European Cement Association
3. Cepi – Confederation of European Paper Industries
4. Cerame-Unie - European Ceramic Industry Association
5. Epmf – European Precious Metals Federation
6. European Copper Institute
7. Esga – European Special Glass Association
8. Esta – European Steel Tube Association
9. EuroAlliages - Association of European ferro-Alloy producers
10. Eurogypsum - Gypsum Industry
11. Eula – European Lime Association
12. Exca - European Expanded Clay Association
13. Feve – The European Container Glass Association
14. Association of the world's Primary Nickel Producers
15. International Zinc Association
1 In fact, there is no single approach on tiering, as there is no sound basis to build a tiered approach in the EU ETS.
Hydrophobic Deep Eutectic Solvents promise to play key role in making paper industry more sustainable
PhD research carried out as part of the PROVIDES project has recently resulted in promising new sustainable hydrophobic Deep Eutectic Solvents (DESs). These hydrophobic DESs could successfully replace chemical solvents in the paper recycling process in order to remove transition metal ions such as iron and manganese from paper pulp.
Coordinated by ISPT, the industry-driven PROVIDES project focuses on developing environmentally friendly alternatives to chemical solvents in the European pulp and paper industry. It is financially supported by 20 industrial partners.
Deep Eutectic Solvents (DESs) are nature-based, renewable, biodegradable, low-volatile and cost-effective. When used for producing high-quality cellulose fibers in paper-making applications, they are extremely energy efficient, particularly because they do not require high temperatures. They offer a groundbreaking new method for the pulping of many different lignocellulosic materials for producing chemical pulp, pure lignin and other chemicals.
Read the full press release by ISPT here.
DES was the winning project of the Two Team Project, a CEPI project thanks to which the industry identified eight breakthrough technologies that would help decarbonise papermaking. Read more about it here.
CEPI has joined I.D.E.A.S., a European informal multi-stakeholder platform for advocates of demand-side flexibility. I.D.E.A.S stands for:
• Improve energy efficiency
• Develop new business models
• Empower consumers
• Address security of supply and competitiveness
• Support a cost-efficient integration of renewable energy sources
The aim of the platform is to contribute to the development and implementation of European policies and initiatives to drive the deployment of flexible demand side resources in support of EU’s goals in energy and climate, security of supply and competitiveness.
The platform consists of the following European industry associations and civil society organisations:
- European Building Automation Controls Association
- COGEN Europe
- EDSO for smart grids
- European Climate Foundation
- European Copper Institute
- Smart Energy Demand Coalition
- European Heat Pump Association
- Solar Power Europe
- IFIEC Europe
- EREF - European Renewable Energies Federation
- Wind Europe
We are looking forward to sharing intelligence and expertise and exchanging on possible common actions.
Statement in view of the Environment Council on 20 June 2016
As a market-based system, emissions trading has the best potential to reduce greenhouse gas emissions in the lowest-cost way, and to create a market signal to drive low-carbon investment. The undersigned associations support the principles of the EU ETS as the cornerstone mechanism to deliver cost-efficient emission reductions in the EU while at the same time securing a global level playing field for industry.
But, for this to be achievable, we need to ensure that the EU ETS works for every covered sector. We must make sure that the energy-intensive, carbon-intensive and/or trade-exposed industries, operating in a highly competitive global market get the right kind of support to enable them to continue to reduce emissions within the EU. For the power sector, which needs significant levels of investment to secure and decarbonise the electricity supply, we must ensure a carbon price that provides a meaningful signal towards the sector’s low carbon investment decisions today and tomorrow.
The post 2020 ETS reform must focus on achieving long-lasting, holistic and effective changes to the system in order to instil confidence in the market. An essential element of the reform is to provide long-term predictability and legal stability to industry and investors, and to avoid the quick-fixes and piecemeal approach we have seen in the recent past.
In this respect, the European Commission’s proposal to set, in the ETS Directive itself, the ratio between the shares of allowances for auctioning and those for free allocation is an element of certainty. However, the rules should ensure the right balance between ensuring liquidity with regard to the available auctioning volumes and providing the necessary volume of free allowances on the level of best performers in order to avoid carbon and investment leakage.
The undersigned associations are committed to make the reform of the EU ETS a success. But it must be a success for all the covered sectors. As representatives of major industrial sectors, we will remain firm on this point as this will be essential to develop and strengthen the industrial value chain across Europe as well as European industry’s international competitiveness.