Benchmarks to evaluate carbon leakage exposure should be based on real and verified data without “flat rate” adjustments. The “flat rate” reductions proposed by the European Commission will complete the disconnection between free allocation and sectoral realities. Under the current system, benchmarks are the only existing link between the technology developments in the different sectors and the level of carbon leakage protection.
In addition, the “flat rate” reductions will penalise the sectors where available solutions to reduce emissions have been deployed in the previous phases, such as in flat glass making. Over the last years, the implementation of available low-carbon technologies in our industry has generated an average reduction in the float glass benchmark of 0.2% annually between 2008 and 2012. In view of thermodynamic science, raw material use and infrastructures’ production cycles, that product benchmark is not expected to decrease at a faster pace over phase 4.
Under the EC proposal, a “low flat rate” of 0.5% annually would be applied to the float glass benchmark. This means an annual factor 2.5 times higher than what is achievable to date. Amount of free allocation to industry would then become completely disconnected from industrial realities.
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