Chemical industry calls for sustainable emission trading system

With the European Commission expected to publish its proposal imminently, the European chemical industry is calling for a sustainable CO2 emission trading system (ETS).

Cefic, the European Chemical Industry Council, thinks it is essential to go beyond apparent improvements the Commission has indicated in the process.

According to Alain Perroy, Cefic director general, the ETS must preserve the whole industry's competitive capacity to remain an innovative solution provider for the common good.

"Cefic calls for an improved ETS to fight climate change. To win this crucial battle, we need a competitive chemical industry in Europe. On different occasions, we have called on the European Commission to be courageous enough to improve the ETS further in order to give it a sustainable and competitive impetus."

To meet its new commitments beyond the Kyoto protocol provisions against climate change trends, the Commission's proposal envisages having full auctioning by 2020 for industry sectors to have the right to release CO₂ emissions. Without an international agreement putting similar constraints on producers outside the EU, auctioning would damage the EU chemical industry's capacity to reduce its own emissions and to create products helping the rest of the economy to do so, Cefic claims.

It believes that granting free CO₂ emission permits along with benchmarks in the meantime is the only workable solution, especially for all energy intensive industries. Without such benchmarks, the scheme would punish technology leaders.

The chemical industry acknowledges the will to push for renewable energies but again, as they are highly used as raw materials for its processes, it is concerned over negative side-effects on electricity prices and limited access to raw materials. The chemical industry therefore fears a rise of its production costs that would damage the whole economy.

To be efficient, says Cefic, the ETS must also include relevant sectors and not extend its scope beyond reason. For this reason it calls for the exclusion of small CO₂ emitters from the scheme since their inclusion would not be cost-effective. Indeed, according to the latest EEA report, an emission threshold of 50,000 tonnes a year would exclude only 5% of the emissions currently covered by the ETS, while reducing the number of installations burdened with administration and costs by 75%.