Strategic choices for ETS post-2020: Allow Energy Intensive Industries to be competitive and grow in Europe
The Alliance of Energy Intensive Industries, representing over 30.000 European companies and 4 million jobs, wishes to be an active contributor in the upcoming revision of the EU ETS. This paper contains Alliance proposals on carbon leakage protection, free allocation principles and competitiveness under ETS Phase IV to ensure simple, fair, predictable and effective rules i.e.:
- Carbon leakage protection needs to be the first element of the ETS revision based on the same criteria and assumptions as under Phase III, as well as on technically and economically achievable benchmarks;
- An EU-wide harmonized system must be put in place, which fully off-sets direct and indirect costs at the level of the most efficient installations in all Member States; therefore, no cross-sectoral correction factor should be applied to free allocation;
- Allocation methodology must be closely aligned with real/recent production levels;
- Innovation support must be extended to industrial sectors;
These principles are fully compatible with the March and October 2014 European Council Conclusions and reflect the industry contribution to the Commission questionnaire, following the meeting with Commissioner Arias Cañete in February 2015. Those principles are further detailed in the paper below.