Cefic asks for clarity over EU’s carbon leakage definition

15 December 2008 16:11  [Source: ICIS news]

PARIS (ICIS news)--Last week’s compromise agreement on the EU climate package by EU leaders acknowledged the need to protect industry while cutting emissions, but more clarity is needed over the issue of carbon leakage, the European Chemical Industry Council (Cefic) said on Monday.

Cefic said it wants more clarity over the trade intensity used as a criterion for defining sectors as exposed to carbon leakage – the practice of companies moving factories to countries outside the EU with less stringent rules on carbon emissions – and says it is essential to take into consideration all trade analysis, including downstream levels.

EU leaders agreed last week that installations included in the EU Emissions Trading Scheme (ETS) that are in sectors exposed to a significant risk of carbon leakage will be allocated 100% of emissions allowances free of charge at the level of the benchmark of the best technology available after 2012.

“Carbon leakage has been recognized as a true risk by the European Council,” said Cefic director-general Alain Perroy.

“We now need some precise conditions for exposed sectors to encourage efficient manufacturers,” he said.

“Chemical industries have indeed many downstream users – textile, cars, housing, computers – and it is crucial to include the value chain in the legal text to carry out the trade analysis including all users,” said Cefic.

The European Parliament will vote on the climate package on 17 December.

To discuss issues facing the chemical industry go to ICIS connect

By: Philippa Jones
+44 20 8652 3214

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