Three ceramic sectors are concerned with the qualitative assessment of the carbon leakage risk for the EU Emission Trading System phase 4 (2021 – 2030). The following sectors submitted an application to the European Commission’s DG CLIMA for an additional assessment, the so called “2nd level assessment” at the beginning of August:
They were found eligible for such an assessment according to the EC note on the preliminary carbon leakage list due to the carbon leakage indicator above 0.15 or, as in case of the bricks’ sector, the emission intensity above 1.5.
The European Commission will now consider the application. The Commission’s assessment will focus on three pillars: abatement potential, market characteristics, and profit margins, as laid out by the reviewed ETS Directive (EU) 2018/410. The above sectors submitted verified reports with evidence showing that for all three pillars there is limited, or no, possibility of the carbon cost pass through in their market situation, without losing competitiveness. It is key to retain the carbon leakage status for these ceramic sectors, as the growing carbon costs would in some cases equal or even exceed their profit margins (as in case of bricks and roof tiles). Any loss of the carbon leakage status would be detrimental to the sectors’ competitiveness.
The European Commission will present the outcome of their assessments later in Autumn; it plans to adopt the delegated act on the carbon leakage list by the end of the year.