Manufacturers demand radical reform of EU carbon market

The manufacturing trade body EEF said on Thursday that failure to reform the EU Emissions Trading System would result in declining industrial investment in Europe.

EEF issued its plea to the European Council, warning that failure to reform the EU’s climate change policy, and specifically the Emissions Trading System would cause the region to alienate investors. Energy Intensive Industries are particularly at risk it said.

EEF’s head of climate & environment policy Gareth Stace said: “Reducing our carbon emissions through to 2030 is going to be an enormous challenge with the targets currently on the table representing a tripling of effort from 2020 onwards. We cannot hit those targets without support for energy intensive industries and reforms must ensure we retain these in Europe.”

Stace continued: “If we leave the EU ETS essentially as it is today with only minor reforms then we will only serve to push these vital industries through the exit door to other parts of the world.”

EEF’s claims are supported by evidence from Eurofer, the European Steel Association, which has estimated that without these vital reforms to improve carbon leakage protection of EIIs, the European Steel sector could face costs of between 40 and 60 billion Euros between 2021 and 2030.

Furthermore, energy intensive industries are reaching the limit of their ability to achieve further efficiency and carbon reduction improvements without new changes in technology, such as carbon capture and storage, (CCS) coming on stream warned EEF.

The European Council will meet in October to reach agreement on an energy and climate change framework to guide the EU through to 2030. This will examine a new emissions reduction target and the possibility of renewed commitments for energy efficiency and renewable energy.