After Greece, the Czech Republic, Poland and Romania (see EUROPE 13874/16), France, Germany, Spain and Estonia are also calling for an adjustment of the benchmark criteria for the greenhouse gas Emissions Trading System in the European Union (EU ETS or ETS).
In a working document that Agence Europe was able to consult (non-paper) on Friday 29 May, following the ‘Competitiveness’ Council of 28 May, the four delegations call on the Commission to adopt “a pragmatic approach”. They are therefore asking it to propose alternatives to the methodologies for calculating EU ETS benchmark criteria for the fuel and heating sectors, such as “a specific maximum annual reduction for the benchmark criteria”.
Benchmark values far from unanimous. On 10 May, the European Commission announced the update of the ETS benchmark values, which make it possible to grant free allowances to the 10% of installations with the best performance in terms of their CO2 emissions (see EUROPE 13866/6).
This methodology provides for the allocation of free allowances to be gradually phased out after 2026, from 30% to 0% in 2030, for the sectors least exposed to the risk of relocation outside the EU. The sectors most exposed will receive 100% of their allocations free of charge.
Earlier this week, Greece, the Czech Republic, Poland and Romania were calling for an increase in the allocation of free allowances for European energy-intensive companies.
Carbon leakage outside the EU still at centre of debate. The argument put forward by the four Member States is based on the fact that there are not necessarily “viable alternatives or the technologies needed to decarbonise at the pace imposed by the revised benchmark values” in these sectors. They are raising the threat of carbon leakage – in other words, factories relocating outside the EU.
They are also asking the Commission for “clarity” on these benchmark criteria “as soon as possible”. The latter is also invited to present a targeted legislative proposal on fallback benchmarks (that is, the substitute calculation methods used to allocate free allowances to industrial heating and fuel installations) – in addition to the revision of the ETS scheduled for 15 July – and to assess the legal possibility of applying these new benchmarks retroactively, from 1 January 2026. (Original version in French by Nadège Delépine)