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Carbon leakage list gets MEP greenlight

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World Cement,

The European Parliament has upheld plans to grant carbon allowances amounting to billions of euros to heavy industries, including cement. The allowances are to guard against carbon leakage, whereby the high price of EU Emissions Trading System permits would make the cost of doing business in the EU unsustainable, forcing industry to move overseas where environmental regulations are less stringent.

The allowances amount to around €2 billion. This support is in place for the period 2015 – 2019 and was originally granted in July. Bas Eickhout, Dutch Green MEP, had objected to the plans on the grounds that the research suggests there is no real risk of the various industrial sectors relocating, bringing the matter back to the table this week. MEPs approved the proposal, despite the objections.

The carbon-leakage list includes cement, lime and steel manufacturers, as well as producers of refined petroleum products, aluminium and other metals, among other products. The list will be reviewed every five years.

As well as the potential for relocation, objectors to the carbon leakage list cited the permit price as an issue, given that the proposal is based on a carbon price of €30/tonne when the current price is below €6.

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