The EU’s energy intensive industries are trying to get a “free lunch” in the EU’s climate change agenda by making false claims and creating excessive “hype” about the threat of delocalisation or “carbon leakage”, writes Green MEP Claude Turmes ahead of the upcoming Council summit.
“The myth which the EU energy intensive industry lobby tries to establish is that, on the one hand, we have a highly responsible and environmentally-friendly EU industry and, on the other hand, all investments made outside the EU in steel, paper [and] aluminium would be done on the basis of inferior standards, particularly in terms of energy efficiency,” says Turmes, Parliament’s rapporteur for the Commission’s proposal on renewable energy.
Some of the world’s most energy efficient and environmentally sustainable cement and steel factories are being built outside the EU, says Turmes, who argues that “all new investments in the energy intensive industry – in Brazil, in Kazakhstan or in China – are always more energy efficient than old EU production processes”.
The MEP’s comments were communicated to EURACTIV as EU leaders prepare to head to Brussels for the annual Spring European Summit of 13 to 14 March. How energy intensive industries will be treated in the EU’s carbon market, the EU Emission’s Trading Scheme (EU ETS), will be a main topic of discussion during the summit.
Many firms are pushing for free EU ETS permit allocation for the post 2013 CO2 trading period, and are warning EU leaders that forcing the energy intensive industry to purchase CO2 allowances at auction will drive factories and jobs out of Europe. But Turmes argues that industries are pushing for free permits on the basis of faulty claims.
“According to the energy intensive industry lobby, EU industry is heavily exposed to global competition. But exposure to non-EU competition is not even 2% for the EU’s lime and cement industry, and around 5% for EU refineries. For the steel sector competition does not reach 20%,” says Turmes.
Rather than handing out free allowances, the MEP says firms should be subjected to energy taxes, with revenues earmarked and placed in a special fund to help companies purchase cleaner processing technology and to upgrade installations.
State co-financing based on energy tax revenues, which Turmes says has worked well in Denmark, should be accompanied by a carbon import tax on outside competitors that are not constrained by high carbon prices, he adds.
“The European Parliament and national governments should stick to the proposal of the Commission to go for 100% auctioning of CO2 certificates under the ETS. All or at least parts of these revenues should be earmarked to be re-invested in upgrading the energy performance of existing and new industrial installations”, concludes Turmes.