MEP Inmaculada Rodríguez-Piñero, Chair of the European Parliament Ceramics Forum (EPCF), hosted the EPCF breakfast debate Making EU ETS work for small emitters.
This EPCF breakfast debate was an opportunity for policymakers and European ceramic executives to exchange on the post-2020 review of the EU Emissions Trading Scheme (ETS). One of the key issues for the European ceramic industry, which is 80% composed of SMEs, is the role of small emitters. The event was attended by MEPs, representatives from the member states as well as ceramic industry executives and members with expertise in ETS.
ETS rules on CO2 quota allocation, carbon leakage, benchmarks, verification and reporting all have a different impact on sectors that are more heterogeneous and with a large number of small emitters. The impact on such sectors has to be properly assessed and existing tools on small emitters could be deepened and extended to a wider range of installations. In the ceramic industry, part of the 1200 installations included in the ETS qualify already today as small emitters and make use of the equivalent measures in their Member States (as defined under Art. 27 of the ETS Directive). This is why ceramic industry would welcome the possibility to extend the scope of the equivalent measures to installations with annual emissions up to 50,000 tCO2e (instead of 25,000 tCO2e/year).
Among other issues a French-British proposal for “tiered approach” to carbon leakage allocations was discussed. Ceramic industry is concerned with the approach as it would leave ceramic sectors exposed to the carbon leakage risk and un-level the playing field on both European and global markets.
The EC binary proposal, to grant 100% free allocations up to the level of benchmark for industries at the risk of carbon leakage and 30% to those not on the carbon leakage list, is a better response to the carbon leakage challenges in the EU ETS phase 4.
The discussions covered also the topic of the assessment of carbon leakage risk and its methodology. To accommodate the specificities of heterogenous sectors, such as ceramics, a qualitative carbon leakage assessment is necessary with no threshold (for example for: bricks, roof tiles and clay pipes sector).
For sectors with majority of SMEs, the GVA indicator, on which the emission intensity calculations are based, is overestimated due to the inclusion of labour costs, leading to a relatively lower emission intensity and carbon leakage indicator.
The ceramic industry represents around 10% of the total number of installations but only 1% of industrial emissions under ETS.