|
European Chlor-Alkali cautious of numerous ETS uncertainties
Brussels, 16 December 2008. Euro Chlor, representing the European Chlor-Alkali industry, recognizes several positive elements in the Emission Trading Scheme Review, presented in the proposal adopted today by the European Parliament. However, despite the clear intention to provide measures for the chlorine industry to prevent carbon leakage, a number of details still need to be clarified to bring certainty to the legal framework the industry requires to plan investments. The European chlorine industry, providing essential building blocks which underpin 55 % of the European chemical industry, emphasises its support of the European climate change targets. In this matter the Chlor-Alkali sector occupies a singular position, being a minimal direct emitter of CO2 but as an electricity intensive activity is severely impacted to the pass through of CO2 costs in the price of the electricity it consumes. Energy costs typically amount to 50% of direct manufacturing costs. The ability to pass on the additional cost generated by the ETS is very limited which is why the chlorine sector, although not a direct emitter, would be unfairly exposed to international, global competition. Carbon leakage will be a real threat with industrial activities at risk being motivated over time to shift to regions not subject to similar climate change measures. The chlorine industry has legitimately claimed the right to be awarded the same treatment as other exposed sectors which appears to be implicit in the agreement reached. We seek explicit confirmation of the intention to provide an allocation of free emission permits or the provision of financial measures. The guidance given on the criteria to be met in order to gain recognition as an exposed sector is a significant step forward but more clarification is required in order to understand how these will be applied across all industry groups. In particular the whole value chain must be taken into account using a carbon cost which relates to market value. More discussion too is required on the benchmarks with regard to the transition from 2013 to that to be achieved by 2020 delivering the target emission reductions. Furthermore, benchmarks used for the purposes of ‘financial measures' should recognise the real CO2 cost associated with electricity consumption at plant level. Euro Chlor is looking forward to opportunities to work with the EU-institutions in order to clarify these uncertainties. Further information:Alistair J Steel, Executive Director, Tel: +32 2 676 73 50, mobile +32 478 230066, ast@cefic.be To return to news click here |