09 July 2008 16:48 [Source: ICIS news]
By Nigel Davis
The chemical industry feels threatened, and rightly so. Proposed changes to the EU’s Emissions Trading Scheme (ETS) would hit it hard.
The way in which carbon credits are allocated in the scheme is vitally important and if
Yet talk at the European Parliament represented just the start of what will prove to be a global process. The world is moving, in fits and starts certainly, but moving nevertheless, to tackle climate change. The burden on chemical processing firms will be immense.
For players in
Not only are companies expected now to be carbon aware, they are also expected to be forward looking enough to be tackling the next stages of carbon capture and control. Having achieved a great deal, even more is being demanded of them.
The industry in
But what has been done, clearly, is not enough. To expand in
Those misgivings, however, could turn rapidly into a nightmare if the sector does not win its current battle on ETS phase III.
Industry needs the polluter to pay if it is to improve but it cannot be expected to bear an even greater burden under a cap and trade system which encourages industrial development outside the region to which it applies.
Politicians are not wont to commit to sectoral exemptions from the decision to stop the allocation of free carbon credits after 2012. The European Commission indicated when it released its latest set of climate control proposals that most sectors would have to wait before a decision on whether exemptions might apply could be taken.
The French government, which currently holds the presidency of the EU, seems keen to broker a deal on how different businesses might be treated under the developing EU ETS.
The European Commission’s assessment of different sectors, however, could take until 2011, just a year before the third phase of the ETS is due to start come into effect. Companies cannot plan and are clearly discouraged from investing in
For large parts of the chemicals industry in
The sector in
Producers in the
The Europeans say that their ideas on benchmarking (the eight processes cover something like 90% of greenhouse gas emissions) will be available for lawmakers at the end of the year.
Making progress on benchmarking is vitally important for the sector globally as more attention is paid nationally to climate change.
The chemical industry is exposed in this global debate as never before. The issue extends across plants, processes, markets, technologies, and trade.
If producers are not to be saddled with potentially crippling burdens - effectively production taxes that affect global markets - there are many climate control battles to be won.
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