EC may allocate carbon credits to fertilizer industry

02 July 2009 17:49  [Source: ICIS news]

BRUSSELS (ICIS news)--The fertilizer industry has been added to the list of sectors likely to be offered free carbon credits under an updated EU emissions trading scheme (ETS), a representative of the European Chemical Industry Council (Cefic) said on Thursday.

The European Commission had added the industry to the list of those at risk of exposure to carbon leakage, said Peter Botschek, Cefic's director of energy, health, safety and environment.

Participants at a meeting in Brussels on 1 July learned of the fertilizer industry's addition, said Botschek.

“A preliminary list of sectors that should be eligible to receive free carbon allowances after 2012 was published in April, but this was only based on a quantitative analysis of data,” Botschek said. “The Commission has now done further investigative studies and added qualitative data.”

This extra layer of analysis – which included research into gases other than carbon dioxide emitted by the sector and its trade data – has moved the fertilizer industry into the “at risk” category, he said.

“Plastics and the production of industrial gas have also qualified,” said Botschek.

Botschek said the chemical industry would have preferred to have been considered as a single sector by the Commission during its analysis, but conceded that Brussels “has more or less come to conclusions similar to the ones we had anticipated”.

He denied that industries handed free allocations were being treated too gently.

“Even if industries are included as 'at risk' from carbon leakage and offered 100 percent free allocations from 2013-2020, they are not being offered a free ride as these allocations are based on ambitious benchmarks linked to the top 10 per cent best performing plants in the sector,” insisted Botschek.

“If plants in a sector have very diverse performances this could mean huge costs for underperforming factories.”

The Commission will officially approve a final carbon leakage list on 17 September. This will then be sent to the European Parliament, which has three months to scrutinise it before coming to an opinion, along with EU ministers, in December.

However, this will not be the end of the story as the Commission wants to revisit the list during the first half of 2010 after the Copenhagen summit and an eventual international agreement on climate change.

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By: Philippa Jones
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