Energy industry leaders appealed to the European Parliament on ETS and CBAM: what is required shutterstock

Energy industry leaders appealed to the European Parliament on ETS and CBAM: what is required

Olena Yatseno

They require a facilitating regulatory framework in several areas

European leaders in energy-intensive industries have expressed their concern over recent developments for the cornerstone policy of the Emissions Trading System (ETS) and the planned introduction of the Carbon Border Adjustment Mechanism (CBAM).

They require a facilitating regulatory framework in several areas. Their comments and suggestions were voiced in a common letter to the European Parliament on the eve of the plenary session, where they must make final decisions on ETS and CBAM.

The signatories of the letter stressed that they support the objectives of the European Green Deal. "Our companies are taking concrete actions across several technological pathways to deliver deep emission reductions and climate neutrality by 2050," the letter said. However, they believe that industry’s climate neutrality transition pathways need a predictable and enabling policy framework rather than abrupt step changes

“Our businesses have to plan investments to deliver our energy transition, not only within the Single Market, but also within the global context where Europe’s climate ambition and carbon pricing is much stronger than other regions, whose industry we have to compete with,” the letter says. .

Business representatives noted that achieving the EU 2030 and 2050 climate change targets needs unprecedented investments, with a clear business case for every project. To deliver these, companies require a facilitating regulatory framework that provides a high degree of predictability and legal certainty, most notably in the following areas:

  • Secure and competitive access to sustainable energy and feedstocks with a strong focus on increasing the independence from third-country supplies;
  • Financing support to research, development and upscale of breakthrough technologies through a frontloading of financing for ready-to-go first-of-a-kind projects;
  • Focus on material and technology neutral policies to develop lead markets for climate neutral products bridging the initial cost gap with conventional ones.
  • Effective measures levelling the playing field with international competition where their home markets do not share the same climate ambition.

Legislation needs to accompany this transition with predictable measures and realistic timelines. Step changes risk overburdening companies before they can implement the necessary investments and develop the markets for low carbon products.

In this regard, latest proposals on ETS and CBAM weaken carbon leakage provisions, further increase unilateral regulatory costs and harm the competitiveness of European industries in EU or international markets.

Earlier Ecopolitica reported that The Committee on Environmental Protection in the European Parliament voted for the Frontier Carbon Management Mechanism (CBAM) and the reform of the Emissions Trading Scheme (ETS), which are tools to achieve EU climate targets under the Fit for 55 package. Such a decision should be confirmed by a vote to be held at the plenary meeting in June.

In addition, the European Steel Association Eurofer wrote an open letter to the European Parliament and to member countries on changes to the EU Emissions Trading System (ETS), which the association believes will "derail" Europe's green steel transition.

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