Chemical industry hopes to avoid EU permit payments

The ETS, introduced in 2005, is a key pillar of European proposals to cut CO₂ emissions by 20 per cent (from 1990 levels) by 2020. The scheme makes energy-intensive companies trade allowances to emit CO₂. First handed out too generously, all such allowances are now expected to be bought through auction by 2020, with this change phased in gradually from 2013. The scheme is also being expanded to cover further industries, including petrochemicals, so that about 50 per cent of all emissions are covered.

’We are against auctioning for the chemical sector because it is energy intensive, and we cannot pass costs on to the consumer because, unlike the electricity sector, we are subject to international competition,’ says François Cornélis, president of Total Chemicals. ’The European chemical industry is extremely efficient in terms of energy, and has made much progress in recent years. If more burden is put on us, there will be "carbon leakage", with production moving to countries where it’s not so controlled.’

Instead, European chemical industry trade association Cefic has proposed that producers are doled out free allowances for performing better than a benchmark level of carbon emissions, and penalised if they do not. This benchmark would not be fixed - over time, it could be made more strict.

There is also disagreement on what to do with the money raised from the auction of emission permits. The European Parliament wants it to be spent on technology related to climate change - something contested by member states who don’t want their spending dictated by Brussels. As  Chemistry World went to press, the Parliament had brought forward its vote on the EU’s climate and energy proposals to the beginning of December, to pile on pressure ahead of a European summit on 11 December, where EU member states will vote on the trading scheme proposals.   

The European Parliament’s environment committee has also proposed that new power stations should be limited to 500g of CO₂ emissions per kWh of power generated. This limit would require all new coal-fired power stations to fit carbon capture and storage technology - though new gas-fired plants would be unaffected (with typical emissions of 340g/kWh). 

Sarah Houlton