As part of the work conducted on the Emissions Trading Directive, CEMBUREAU developed a clinker benchmarking proposal, which was quite an achievement even though, on one aspect – method for allocation to installations –, the decision to opt for a single EU-wide benchmark was adopted by a substantial majority, not a unanimous vote.
In early November 2009 ECOFYS, Fraunhofer and Öko-Institute, the consortium appointed by the European Commission to study benchmarks for the purpose of allocating free allowances, published its report entitled “Methodology for the free allocation of emissions allowances in the EU-ETS post 2012”. The report recommended the adoption, in the cement industry, of the EU-wide clinker benchmark supported by CEMBUREAU. Looking at the possibility to benchmark clinker or cement, ECOFYS opted for the first solution mainly on the ground of workability.
This solution is supported broadly by the European cement industry, but it is not unanimous. To a substantial majority of CEMBUREAU Members and cement companies operating in Europe, it is evident that Annex I to the revised Directive on Emission Trading, just like its predecessor, applies only to installations producing clinker. The National Allocation Plans in the first – trial – and the 2nd period, up to end 2012, have only applied to clinker producing installations. The clinker benchmark must thus be seen as one more step along a continued and well established approach.
Could it be argued that this solution would remove the incentive to diminish CO2 intensity through the reduction of the clinker factor? CEMBUREAU does not think it would be the case. The reduction of the clinker factor, through replacing clinker by additions such as slag and fly ash, had started before the urge to reduce CO2 emissions had appeared and it has since progressed at a constant pace even in those years, since 2005, when free allowances were allocated to cover clinker production. A producer receiving free allowances to cover its clinker production will always have an interest to reduce its CO2 emissions per tonne of cement.
With the clinker benchmark the cement industry will also have its future in its own hands. The benchmark will be defined for a relatively long time – at least 2020 – during which the economy may fluctuate and the availability of substitutes as well. With the present economic crisis and fall in steel production, for example, there is less slag to go around and, in the future, dependency on a scarce resource could obviously become a serious threat.
Finally, the proposed solution makes sense as it creates a level playing field in which all cement producers can compete in the market place with no regional disadvantage to producers located in parts of Europe where clinker substitutes or additions are not available.
Latest news:
Cement industry comments on harmonised free allocation methodology
In July 2011, CEMBUREAU submitted comments to the European Commission’s draft guidance document n°7 (issued on 20 July 2011) on the harmonised free allocation methodology for the EU Emission Trading Scheme (ETSi). In its response, the Association highlighted the importance of ensuring that Member States should have the flexibility to consider capacity rationalisation when determining the allocation of allowances, provided that the environmental benefit can be demonstrated. CEMBUREAU also commented on the issues of initial capacity in the case of significant changes as well as reduction factors in the case of partial cessation of operations.
Poland takes Commission to Court over benchmark rules
On 8 July 2011 the Polish government filed a lawsuit against the European Commission, asking the European Court of Justice to annul the rules for the allocation of permits over 2013-2020. Poland believes that the benchmark rules are too inflexible to provide energy-intensive industries, such as steel and cement, with enough free European Union Allowances (EUAs) to compensate for the increase in costs.
Benchmarking decision published in Official Journal
The Commission Decision determining transitional EU-wide rules for harmonised free allocation of emission allowances has been published in the EU’s Official Journal (OJ). The Decision can be found here. Read more
Council and Parliament not opposed to draft benchmarks governing free allocations
The Council has decided not to oppose to the Draft Commission Decision determining transitional Union-wide rules for the harmonised free allocation of emission allowances in the EU Emissions Trading System from 2013. This means that now that the Council has given its consent, the Commission may adopt the act. From 2013, free allocation of emission allowances in the ETSi will be determined by these benchmarks. Read more
CEMBUREAU welcomes draft Decision on Benchmarks and calls for interpretative Guidance on Allocation Rules
In December 2010, and pursuant to Article 10a (1) of the Emission Trading Directive, a “Decision” on benchmarks for free allocation of allowances and other allocation rules is to be taken, through the so-called pre-Lisbon Treaty comitology procedure by a Committee composed of representatives of the Member States and the European Commission – the Climate Change Committee.
That decision was adopted by a majority of 281 votes out of 345 votes on 15 December after a high suspense negotiation in which the benchmark for free allocation to the cement industry remained in the balance until the last moment. A clear majority finally emerged in favour of an EU-wide clinker benchmark of 766 kg CO2 per tonne of grey cement clinker and an EU-wide benchmark of 987 kg CO2 per tonne of white cement clinker. Common sense thus prevailed and CEMBUREAU welcomes the Decision which still has to undergo parliamentary scrutiny in the European Parliament Committee on Environment, Public Health and Food Safety in the 1st quarter of 2011. Read more
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