Last week's EU climate change accord was "a step in the right direction," according to the chemical industry, whose reaction starkly contrasts the huge disappointment expressed by environmental groups. 

Warnings that stringent EU climate rules would force factories to relocate abroad – a process dubbed 'carbon leakage' - had been running high among manufacturing industries.

The chemical industry has teamed up with other energy-intensive sectors, including cement, steel, glass and paper, to ask for derogations under the revised EU Emissions Trading Scheme for carbon dioxide (see EurActiv Links Dossier).

Germany, the European country with the largest manufacturing base, has long been asking the EU to act on the risks of 'carbon leakage', pushing for specific recognition of the issue as early as March this year (EurActiv 13/03/08).

But the worst has been avoided, they now claim, hailing an agreement reached by EU leaders on the climate change and energy "package" of legislation last week, which reforms the EU's flagship cap-and-trade scheme for the period after 2013.

"Carbon leakage has been recognised as a true risk by the European Council," said Alain Perroy, director-general of Cefic, the European chemical industry council. 

However, that commitment would now need to be confirmed both "legally and politically", he stressed. "We now need some precise conditions for exposed sectors to encourage efficient manufacturers," said Perroy.

Under the agreement, the amount of emissions allowed by industry will be cut on a yearly basis from 2013. "Industry which fails to respond will have to pay more," said José Manuel Barroso, president of the European Commission, after the EU summit on 12 December.

Cefic particularly welcomed references made to "performance benchmarking", a process whereby those industries that use the cleanest technologies available are granted 100% free CO2 emissions rights when it can be proven that they are exposed to international competition.

But it said the "trade intensity" of individual sectors needed to be defined more precisely, describing it as "essential" to consider downstream users of chemicals like the textile, car, housing and computer sectors. "It is crucial to include the value chain in the legal text to carry out the trade analysis including all users," Cefic stressed.

"A low-carbon economy can be a great opportunity if the transition is properly managed. Cefic advocates for that purpose extensive usage of performance benchmarking," it stated.