France wants early list of sectors exposed to 'carbon leakage'[fr][de] 

A 23 September French EU Presidency working document , seen by EurActiv, asks EU member states to agree to put pressure on the Commission to release, by June 2009, a list of industries that could receive free CO2 emissions allowances to protect them from competition by producers operating in countries where pollution is cheaper. 

France's position, which is backed by Germany, reflects the concerns of industries who say that the EU Emissions Trading Scheme (EU ETS), due to be re-launched with stricter emissions reductions criteria as of 2013, will significantly drive up manufacturing costs. Rising costs would in turn expose the EU to 'carbon leakage', since manufacturers of energy-intensive goods like aluminium and cement would be forced to relocate their operations and emissions outside the EU's borders in order to remain internationally competitive.

Industries also complain that delaying the process of identifying exempt sectors undermines investor certainty and confidence.

The Commission is aware of these concerns and has started setting out a list of criteria for determining which sectors and sub-sectors could qualify for exemptions to the EU ETS (EurActiv 22/09/08).

But Brussels does not want to preclude the outcome of international climate talks, scheduled to wrap up in Copenhagen in December 2009, and has indicated it would publish such a list at the earliest in 2010, with specific measures to guard against carbon leakage to be proposed by 2011.

The French EU Presidency wants the Commission to put forward safeguard measures in 2010, so that Council and Parliament could make the measures law by December of that year.

Parliament, meanwhile, is also calling on the Commission to identify sectors at risk as soon as possible. But many MEPs, including Irish Christian Democrat Avril Doyle, who is shepherding the EU ETS file through Parliament, agree that identifying sectors before December 2009 would undermine the EU's negotiating mandate and credibility in Copenhagen.

EU environment ministers will debate the file in Luxembourg on 20 October, while MEPs in the environment committee will vote on the Doyle report on 7 October.