Cembureau calls for predictable EU-ETS legal framework

In a response to a public consultation on the revision of the EU Emissions Trading System (EU ETS) Directive, European cement association Cembureau advocates an improved EU-ETS after 2020 that “creates a predictable legal framework and ensures a stable long-term globally-equalised carbon price to foster investments in low-carbon technologies and eliminates carbon leakage risk.” The association argues that there should be free allocation of carbon credits for cement producers in the absence of an international agreements that places all competing producers on a level footing in an international level playing field.

To minimise carbon leakage, the association believes that the share of allowances dedicated to free allocation should be sufficient to avoid carbon leakage. The list of companies vulnerable to carbon leakage must be determined on the basis of the cumulative direct and indirect CO2 cost burden and be applicable for free allocation as well as compensation for indirect costs. In addition, capital-intensive businesses with long investment cycles, such as the cement industry, require increased certainty and predictability about EU investments. Therefore, the list should be fixed for the entire phase.

In terms of benchmark reviews, the benchmark curve (CITL data) for all EU cement plants should be the source of reference. Furthermore, the benchmark should be calculated in a statistically robust way and be updated periodically to ensure predictability, according to Cembureau. It should be set at an ambitious but reasonable level and should not be distorted by statistical outliers.