Strasbourg- 15 February 2017. Today the European Parliament has adopted its position on the EU ETS Directive review for the post 2020 period ahead of the inter-institutional trilogue with a majority of 379 votes against 263 rejections and 57 abstentions.
“We need to make sure that the EU does not decarbonize by de-industrialising.” - says Alain Delcourt, Cerame-Unie President – “We welcome the fact that this principle was recognised by the majority of the MEPs at a vote today and that the European Parliament has rejected the discriminatory and legally questionable proposal for the import inclusion mechanism, which would have directly impacted ceramic bricks, roof tiles and clay pipes sectors. Jobs, growth and innovation are equally important in all manufacturing industries and all sectors investing in carbon reduction should be rewarded, if they want to stay and invest in Europe. An equal level playing field for all energy intensive industries is essential.”
The EP position sets EU ETS on a path towards more ambition (via such measures as potentially reviewed Linear Reduction Factor in the near future, or proposal for an increased intake rate for the Market Stability Reserve in next years), which is consequently expected to drive the CO2 price up. It also proposes a conditional decrease of the auctioning share by 5 p.p. to minimize the risk of the Cross Sectoral Correction Factor (CSCF), which was applied on industries in the current ETS phase. However, in the CSCF’s application, it is proposed to save some sectors at the expense of others, which should be considered discriminatory and infringing upon the environmental integrity of the EU ETS scheme. Moreover, on the positive side, the EP wants to bring the ETS closer to market and economic realities thanks to more dynamic allocations and fine-tuning the carbon leakage assessment rules.
“The ETS can ultimately be strengthened, if the future conditions for industry competitiveness, low carbon investments and innovation in the EU are secured. Other elements of the EU ETS reform still need to be worked out to guarantee that the system ‘works’ best and delivers the efficient emission reductions. Today’s vote is a progress towards reconciling both goals: an increase in climate ambition with industries’ competitiveness and growth. ” - says Renaud Batier, Cerame-Unie Director General. Remaining issues include the indirect cost compensations as the ceramic industry is currently not eligible for indirect cost compensations despite the direct and indirect exposure to carbon leakage of all ceramic sectors.
Small emitter simplifications, which are of interest to the ceramic industry, composed in a large majority of small emitting installations, were also discussed by ITRE and ENVI Committees. The adopted proposal foresees an increased eligibility threshold for the voluntary national measures, however imposes a new limitation on the application of these provisions to SMEs only. The ceramic industry reiterates its views that this option must be available for all small emitter installations (regardless company size). A company with small emitter installations and employing 249 employees would have been allowed to opt-out while a company with the same installations but employing 250 employees would not enjoy the same choice.
The EP vote gives MEP Ian Duncan a mandate to lead the negotiations on behalf of the European Parliament and will start a next phase in the EU ETS reform progress.
The ETS reform is of key importance for the future of the European ceramic industry, as the EU ETS covers over 1,200 ceramic installations, representing 10% of the total number of ETS installations and only 1% of all industrial emissions, but at the same time - a large proportion of ceramic EU production (75% of industry’s value, including such sectors as: wall and floor tiles, bricks and roof tiles, clay pipes, sanitaryware, refractories and expanded clay). The EU ceramic industry represents over 200 000 direct jobs and a production value of 28bn EUR (in 2016).