Commission proposals on the 2030 energy and climate framework should have taken into account past experience: overlapping targets and unilateral GHG ambition is not the winning combination for a competitive EU economy

Posted on 22/01/2014 in Press Release

Brussels, 22 January 2014: EUROPIA is concerned that the framework for energy and climate to 2030, as proposed by the Commission today, did not avoid the most costly features of the 2008 package, notably assigning multiple targets for the same objective and imposing EU-only GHG reduction targets on industry. Despite the stated greater focus on competitiveness, the envisaged measures look likely to adversely impact it for an industry such as Refining.

Currently, the EU faces conflicting challenges to grow its economy on a competitive and sustainable basis. The Commission’s communication “A policy framework for climate and energy in the period from 2020 to 2030” should be the start of a discussion on these challenges and the trade-offs between them. EUROPIA believes that the European Commission should have better taken into account past experience by avoiding multiple targets. A single and realistic GHG target would allow cost-effective emission reductions in industry whilst avoiding the complexity and economic distortions caused by multiple targets. Better account should also be taken of global developments since 2008, especially the loss of international competitiveness of European industry.

EUROPIA Director General, Chris Beddoes said: “The proposed package is complex and very new to most readers and we will look at it carefully before commenting in details. It must now serve as basis for much wider stakeholder debate about Europe’s path to 2030, especially before binding targets and measures, which could harm the competitiveness of European industry if other regions do not implement equivalent measures, are finally adopted. Europia will contribute to what we hope will be an open and constructive debate based upon fact based and objective analysis “.

EUROPIA acknowledges that the intention to maintain Carbon Leakage protection beyond 2020 is a positive step, however the share of the EU GHG reduction to be borne by ETS sectors looks like posing major challenges for an energy intensive industry such as Refining. We believe that the ETS can function best as a market based mechanism, so we will look closely to determine if the proposed market stability mechanism could damage this market based approach.

Progressing towards a low-carbon economy will require adjustments across the economy including the high-carbon sectors, which currently represent 15 key industries employing up to 12% of EU workforce[1]or

24 million people. These real jobs are at risk and must be carefully balanced against the predicted 5 million jobs the Commission envisages would be created.

Chris Beddoes commented: “These job threats are real. European Refining is losing more jobs and shrinking capacity faster than EU demand for its products. Despite its high efficiency, it faces energy costs double those of the competing refining industry in US and cannot afford further EU-only regulatory costs if it is to survive”.

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[1] Staff working document entitled “Exploiting the employment potential of green growth” (SWD(2012) 92 final; Page 8)