Jos Debelke says Brussels is committed to climate leadership, but will help steel, cement industries to comply with rules
By Ed King
The EU will act decisively to protect its remaining energy intensive industries against the risk of “carbon leakage”, the EU Commission’s chief climate official said on Thursday.
Jos Debelke confirmed that European cement, steel-making and other high polluting sectors would get help to comply with the region’s future carbon-cutting policies.
But during a TV debate in Brussels, he dismissed the idea the EU would impose tariffs on high carbon goods from India, China and other competing economies.
“If we were to introduce that now, we could cross out the Paris outcome,” he said, referring to the proposed UN climate deal set to be signed in the French capital this December.
EU leaders are under intense pressure to kickstart the region’s ailing economy. Some industry groups complain that Brussels’ climate targets, which are more ambitious than other major economies, are driving energy-intensive businesses to regions with lighter regulations.
Last September a coalition including glass, cement and fertilizer producers wrote to the EU asking for guarantees they would be protected against future carbon cuts.
Debelke insisted that the Commission was committed to helping heavy industry, in line with plans revealed in October 2014 which effectively exempt some major polluters from the region’s climate targets.
“Let’s be realistic. There is going to be a market for high carbon products,” he said.
“We should not farm out activities to all places in the world, and we must make sure we are not relocating activities due to our climate policy.”
Under the EU’s plans for energy and climate up to 2030 carbon intensive industry will receive free carbon credits worth between €120-300 billion.
These will allow major steel, cement, aluminium and power plants to bypass parts of the bloc’s emissions trading scheme (ETS), which is designed to encourage businesses to cut greenhouse gas emissions.
More half of ETS allowances will remain free, Debelke said, and he was “damn serious” about ensuring more businesses did not leave the EU due to climate laws.
Bas Eickhout, a Green MEP from the Netherlands, said the carbon leakage concept was “exaggerated” and the Commission had to be more “serious” about climate change.
A 2013 EU study based on the ETS between 2005-2012 concluded there was “no evidence detected for the occurrence of carbon leakage”.
But it added there were “indications” this could change over a longer period if the EU remained one of the only regions with a comprehensive climate policy.
“On top of the main drivers of production location, such as shift in demand and higher energy prices, high carbon prices – if only prevalent in Europe – will make global competition (a little bit) harder for European industry,” it said.
More countries appear to be embracing carbon pricing. Last week South Korea’s emission trading scheme launched, while China is expected to open a national market by 2016.
On Wednesday the World Bank added its voice to calls for governments to take advantage of falling oil prices and price up carbon.
Earlier this week, former US Treasury secretary Larry Summers called on the White House to push for a carbon tax of US$25 per tonne, which he said would raise $100 billion a year.