Council adopts climate-energy legislative package

The European Council adopted the climate-energy legislative package, designed to help meet the EU’s target of a 20% reduction in greenhouse gases and a 20% share of renewable energy in the EU’s total energy consumption by 2020, earlier this month. The most significant Directive in the package is, of course, the revision of the Emissions Trading System (ETSⁱ) for greenhouse gases. From 2013 onwards, industry will contribute significantly to the EU’s overall target of cutting greenhouse gas (GHG) emissions by one-fifth compared to 1990 levels by 2020.

The new ETS provides that GHG emission permits will no longer be given to industry for free, but be, in principle, auctioned by Member States from 2013 onwards. ETS sectors must start by purchasing 20% of their emissions permits at auctions in 2013. That rate will rise gradually to 70% in 2020, with a view to reaching 100% in 2027. Ten Member States - Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland and Romania - can apply for reduced auctioning rates in power production: at least 30% in 2013, gradually rising to 100% in 2020.

The Directive also makes it clear that a number of sectors could be exposed to carbon leakage (see editorial).

The European Commission is to determine, via the procedure of comitology with scrutiny, the list of sectors or subsectors vulnerable to carbon leakage for the first time by 31 December 2009 at the latest. The issue of carbon leakage will also be subject to a further review before the start of the third trading period in 2013. Member States must be in compliance with the Directive by 31 December 2012. CEMBUREAU is closely monitoring the establishment of the list of sectors at risk of carbon leakage and has attended the two ECCP meetings which took place in April (see editorial).

Free allocation of allowances alone, however, will not cover the cement industry’s needs because of the cap. Therefore, the establishment of a level playing field by including EU importers in the ETS for as long as no international agreement brings about equal treatment is vitally important. CEMBUREAU is also working on this issue.