Bridges Trade BioRes • Volume 8 • Number 18 • 17th October 2008
Europe sticks to climate targets, seeks way to allay competitiveness concerns
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European heads of state met from 16-17 October to discuss their climate goals at a meeting that was dominated by talks on the global financial crises.
Given the grave financial woes, a number of European leaders – especially from Eastern Europe, but also Germany and Italy – were asking for leeway for their industries, either because of heavy reliance on coal power or due to competitiveness concerns in energy-intensive sectors such as steel.
The EU is debating a legislative package on energy and climate change, which the EU is set to adopt by the end of the year (see Bridges Trade BioRes, 25 January 2008, http://ictsd.net/i/news/biores/9354/). The EU is committed to reducing greenhouse gas emissions by at least 20 percent by 2020, and the Emissions Trading Scheme (ETS) serves as a key tool for achieving the target. Industry, power production and airlines will all be covered by the ETS. Discussions regarding the proportion of emissions permits different sectors will have to buy, or get for free, are ongoing.
Going into the high-level talks, Jose Manuel Barroso, the president of the European Commission said, “Saving the planet does not disappear because of the financial crisis. Of course we understand that in the difficult financial moments, governments become more defensive, but I think our duty is to call the attention of governments and the public in general to the responsibility here.”
The European steel industry, on the other hand, was lobbying for exemptions. The European Metalworkers’ Federation (EMF) and European Confederation of Iron and Steel Industries (EUROFER) appealed to decision makers to “ensure a fair balance between climate change measures on the one side and the competitiveness of the European industry, sustainable investment and high quality jobs on the other,” stressing that they have already taken significant action and cannot be hit by additional costs amounting to billions of Euros per year. Specifically, they wanted to see an improvement in the ETS proposal on leakage, benchmarks, waste gases, electricity costs and international agreements. As long as Europe is moving ahead alone, argue EMF and EUROFER, sectors susceptible to “leakage” – the relocation of carbon-intensive industries to countries with laxer regulations – these sectors should be allocated all their emissions allowances for free. According to a report by the European Commission, industries such as primary aluminium, hot rolled steel and slabs produced in basic oxygen furnaces and clinker would be facing competitiveness concerns unless all trading partners join global efforts to address climate change.
Luxembourg Euro-parliamentarian Claude Turmes, said, however, that “This is alarm level red – Lobbyists from every dirty industry are trying to profit from this [financial] crisis.”
During the tense discussions, the French presidency found a way to move the legislative package ahead. Europe still plans to conclude its work in this regard in December, and according to a draft final statement released just before the close of the meeting, “The European Council confirms its determination to honour the ambitious commitments it has made on climate and energy policy.” The next few months will show just what form the policy will take, and what concessions may be made to specific countries and industries.
Additional information
To view the EMF-EUROFER statement, see http://www.emf-fem.org/press/press_releases/emf_and_eurofer_joint_appeal_to_the_political_decision_makers_on_the_revision_of_the_eu_emissions_trading_system
ICTSD Reporting; “Steelmakers Urge EU to Improve Emissions Proposal,” REUTERS, 3 October 2008; “EU Vows “Cost-Effective” Climate Plan Amid Crisis,” REUTERS, 17 Octoner 2008.
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