EU heads of govt should mend Commission's energy proposals: Cefic

24 January 2014 16:22 Source:ICIS News

LONDON (ICIS)--The European Chemical Industry Council (Cefic) will request the European Council to reconsider the European Commission’s paper published on 22 January on climate and energy policies because competitiveness of European manufacturers could be jeopardised as a result of its application, said Peter Botschek, Cefic’s head of energy and climate, on Friday.

“We are confident the [heads of state and government which compose the European] Council will consider our opinions because they are [more] open to consider proposals to increase the European competitiveness,” Botschek said.

Cefic's executive said they will prepare advice papers aimed at the Council's summits in March and June, in which the heads of government will evaluate and decide on the proposals from the Commission, the EU's executive governing body.

"The Commission appears like a split personality and the package on energy and climate policies shows a cacophony of voices within it," he said.

The Commission aims to cut greenhouse gas emissions by 40% compared with 1990 levels and achieve 27% of renewables energies by 2030, it said on 22 January.

Botschek said that Europe is facing critical times regarding energy costs, and the Commission's paper would increase the burden for European manufacturers to become more competitive globally.

“Other regions don’t have the same EU climate ambitions. Even with the current policies, Europe hasn’t managed to decrease emissions but increase cost burdens, making manufacturers relocate outside the region to consequently import products into Europe which create the same amount of emissions, or even higher,” said Botschek.

The European Commission aims to produce 27% of the total energy from renewables by 2030, but Cefic is also sceptical about that policy’s effectiveness, because by subsidising “uncompetitive” renewables an additional cost is added: jobs are created in that sector, but the EU “loses five times more in the manufacturing sector,” he added.

Botschek said while other regions are exploring other ways of energy and aiming for growth and investment, Europe seems to be heading the opposite way.

“The US is a prime example for this with the shale gas revolution, which consequently is a big headache for European producers. We are seeing huge investment flows toward the US,” he said.

“Europe hasn’t really come to terms with this new source of energy. We see the UK encouraging it but France banning it. As long as it’s safe and secure, Europe should explore this technology,” he added.

The European Commission also announced on 22 January a change in the EU Emissions Trading System (EU ETS) to which Cefic opposes because the ETS reserve mechanism does not differentiate between sectors (power sector/manufacturing industries) and does not provide effective carbon leakage protection.

“The policy announced on 22 January is that emissions trading should serve as an income source for governments’ budgets and support otherwise uncompetitive technologies through a relatively high price,” he said.

“We need the ETS but the allocation needs to allow that efficient manufacturing industries can grow in Europe. This requires that we separate under the ETS the power sector from the industrial energy consumers, because manufacturers cannot finance through the ETS the transition of the power sector unless they lose competitiveness compared to their global partners,” Botschek added.

Cefic issued a statement late on 23 January in which it insisted if the Commission pushed forward its framework for climate and energy policies it would create “further deindustrialisation” in Europe.

“We urge the European Commission and the European Council to make industrial competitiveness, namely jobs and growth, at the heart of EU policies,” said Cefic’s director general Hubert Mandery.

By Jonathan Lopez