If MEPs are influenced by it, the European cement industry could scupper the compromise reached in the environment committee on the long-term reform of the ETS (2021-2030), the Greens/EFA warned the European Parliament in Brussels on Tuesday 7 February, a week before the plenary session vote on the draft compromise that was so hard won in December 2016 to beef up the reform of the ETS while protecting energy intensive European industry (see EUROPE 11690).
For the moment, it is the compromise backed by all the political groups – including by the GUE/NGL group and the Polish MEPs – that is on the table, “but there will be amendments and calls for separate votes from the EPP. That’s certain. The deadline for the submission of amendments is this week”, said Bas Eickhout (Netherlands), a member of the environment committee, and Jakop Dalunde (Sweden), a member of the industry and energy (ITRE) committee on Tuesday 7 February, both worried that a Pandora’s box will be opened next week (on 14 or 15 February) in Strasbourg.
Adjustment mechanism at borders versus free allowances. One key point of the compromise is not to the liking of European cement manufacturers who will not just meekly accept losing one billion free allowances over the period from 2021 to 2030. That point is the removal of the cement and clinker sector from the list of energy intensive industries which receive free allowances as they are at severe risk of carbon leakage and from international competition. The cement sector would not receive any free quotas but, to avoid unfair competition, the compromise would see a WTO-compatible border adjustment measure, to be negotiated by the Commission, put in place by 2019.
Fragile compromise. “The European cement industry is very active at the present time. Our message to MEPs is this: keep the package that is on the table! It’s a fragile compromise because everything is interlinked”, said Eickhout, highlighting, for example, the linear reduction factor among the many other parts of the compromise seeking to push up the carbon price to €20-25 per tonne (compared with €5 currently). He added: “The cement industry has very high trade intensity because it exports a lot. With the free allocations, its exports have increased but innovation in the sector has not advanced in recent years. Windfall profits of over €5 billion were made between 2008 and 2015 (see EUROPE 11679). For the Greens, this is exactly the type of sector that should not feature on the list”. The Green/EFA Group will vote against any attempt to alter the compromise reached on the fate of the cement industry, he warned.
“It’s is not perfect for the cement industry, but the compromise has to be supported in its entirety. The longer the transition to a low-carbon economy is delayed, the costlier and socially difficult it will be”, argued Dalunde, observing that the compromise on the table would not be enough to meet the Paris Agreement target of decarbonisation by 2050 anyway.
The Council of the EU has not yet come to a position. The Maltese Presidency assured MEPs that it would work closely with the member states to “find solutions as quickly as possible” to the difficulties identified at the Environment Council in December (see EUROPE 11710 and 11692). It hopes to make progress at the Environment Council on 28 February ahead of reaching political agreement in June. (Original version in French by Aminata Niang)