Brussels, 09/09/2010 (Agence Europe) - Work is being stepped up at the European Commission for defining “benchmarking” rules governing the granting of free CO2 emission quotas to certain sectors under the directive for the Community's Emissions Trading Scheme (ETS), revised in 2008 for 2012-2020. An inter-service consultation was launched on Wednesday 8 September, on the draft decision prepared by the services of Connie Hedegaard, Commissioner for Climate Action, at the end of a very broad consultation with the industry and member states.
This future decision will help implementation of the revised ETS directive, which lays the foundations for the new rules for allocating around €6 billion in credits (€100 billion at the current carbon tonne price). It also aims to provide references in terms of efficiency and subordinates free allocation of quotas to a scale of best performances in force, in all the different sectors involved. The consultation text stipulates that 64 industrial sectors exposed to significant carbon leakage will benefit from a 100% reference value. This reference value will only be 30 to 80% for other companies. These references are established according to an informed calculation based on the efficiency of 10% of the best performing companies in the sector (in terms of climate protection), which will have a right to 100% free quotas. On Thursday 9 September Hans Bergman, an expert at DG Climate Action, explained that “the reference value multiplied by the traditional production level, will give the level of annual credits awarded. The free allocation of quotas, the total allocation level, will be the reference value multiplied by the emission tonnes but the total allocation level will be capped … this system will be governed by a number of major principles: for the same product, there will be no reference. Neither the input nor the place of production will be taken into account. The reference will be the average performance of 10 of the most efficient companies in a subsector in 2007-2008”.
In its work to identify products that can have a reference, the Commission was able to draw up a list of 50 products (such as cement, hot metal steel, two types of glass, a large number of chemical products, etc) accounting for 75% of the emissions total envisaged. The references will be calculated on the basis of emissions intensity in 2005-2008. The data will be provided by companies, verified by third parties and compared to the most efficient existing technologies. The use of heating and fuels, as well as the CO2 emissions produced by chemical processes, will also be taken into account for these 50 products.
Bergman explained that “the decision lists 50 products, their value and definition, the specific reference for the heat and fuels, and a reference period - 2005-2010, technical specifications for certain refineries, as well as the rules for newcomers”.
The Commission is expecting that too low reference levels are established and emphasises that the directive must be respected by taking into account the technologies available in 2007-2008 and by applying the same reference coefficient up until 2020. In response to those who have doubts regarding possible difficulties for the most polluting industries, the Commission explains that these will have to adapt. In answer to concerns expressed by member states that use too much coal, the Commission points out that the revised ETS directive includes a redistribution mechanism of some of the income raised by the emissions trading from older member states to newer ones. Once the Commission agreement is obtained on the text, it will be subject to an agreement from member states at the “Climate Change” committee and then addressed to Parliament and the Council. These institutions will have three months to approve or reject the proposal. Bergman added that “the deadline has been set for 31 December but a delay is already expected. Member states will have to calculate all allocations to their industries. The Commission will have to ensure that there are not too many free allocations and will therefore introduce correction factors”. The ETS was set up in January 2005 and covers around 10,000 major plants and 45% of CO2 emissions in the EU. (A.N./transl.fl)