According to a Carbon Market Watch study published on Thursday 25 April, energy-intensive heavy industry is the weak link in the EU's transition to decarbonising its economy, but solutions exist to enable this industry, a major emitter of greenhouse gases, to achieve zero net emissions by 2040. This includes the elimination of free allowances in the EU Emissions Trading Scheme.
While greenhouse gas emissions have declined in the energy sector, those of energy-intensive heavy industry such as steel, cement and chemicals have not decreased since 2012 and are not expected to decrease until 2030, the NGO notes. These are the three sectors that benefit from free allowances under the ETS to avoid the risk of "carbon leakage" (offshoring), but as a result make undue profits.
Beyond energy savings, renewable energy deployment and the development of circular business models, Carbon Market Watch considers that the priority is to develop a climate proof industrial strategy for energy-intensive industries that can put the EU on track to achieve zero net emissions by 2040.
The NGO also recommends that EU policymakers must put forward an industrial climate policy framework that includes at least the following components: - Paris Agreement compliance test for environmental permitting; - increased funding for industrial decarbonisation; - carbon performance standards for the production and consumption of energy-intensive materials in Europe; - provisions to incentivise the use of products which contain increasing rates of recycled materials; - a phase-out of free EU ETS allowances; - improved public procurement rules for energy-intensive materials and products. (Original version in French by Aminata Niang)