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ETS Reform Post-2020: Safeguarding EU Industry Competitiveness

Learn about the European climate objectives and industry R&D priorities post-2020. Explore innovative solutions for sustainability challenges and the principles of ETS reform. Discover how realistic benchmarks and carbon leakage protection can drive growth while preserving the environment.

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ETS Reform Post-2020: Safeguarding EU Industry Competitiveness

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  1. EPP hearing: ETS reform post 2020 Position essenscia, May 4th 2016 Els Brouwers Head of Climate and Energy

  2. The European climate objectives require a strong industry R&D priorities of the EU Renewable energy Sustainable transport Manufacturing industry CO2-neutral buildings

  3. The chemical, plastics and life science industry Innovative solutions to tackle the climate challenge Materials to increase battery efficiency Improved insulation for sustainable buildings Ultra light materials for lower fuel consumption in transport Better performance of household applications Innovative lubricants and coatings CO2 as resource for the production of mattresses

  4. The ETS reform: principles • How to safeguard the EU investment climate and competitiveness of its industry, without compromising the environmental objectives? How to avoid corrections down on free allocation through the application of irrealistic benchmarks, correction factors or tiered exposure grade, especially upfront before any need for correction has been proven?

  5. Realistic benchmarks for manufacturing industry without correction factors are key Birkeland-Eyde electric arc method -1%/year reduction of the benchmark Haber-Bosch synthesis Steam reforming natural gas extra correction factor Source: Fertilizers Europe, essenscia

  6. ETS Phase 3 (2013-2020) Available allowances Linear reduction factor -1,74% Initial level of Free allocation (historic activity levels and 10% best performers) Auctioning MSR 1.900 mio Free allocation level with CSCF Allocation 2013 2020

  7. ETS 2021-2030: Commission proposal MSR phase 4 Linear reduction factor -2,2% 1.650 mio (87%) extra correction factor MSR Phase 3 1.900 mio 57% Auctioning share Free allocation 43% Allocation share 2021 2026 2030 Reserve for new installations and higher production 250 mio (13%)

  8. ETS 2021-2030: essenscia proposal MSR phase 4 52% LRF -2,2% MSR Phase 3 1.900 mio 52% Auctioning 48% Allocation 2021 2030 48% Industry reserve

  9. ETS Reform: solutions are at reach… • Creationof robustreserve forallocation • Make a correct calculation of the auctioning share • Use MSR of Phase 3 tofueleconomicgrowth • Recycle unusedallocationfor later years • Carbon leakageprotectionfollowing the dynamic • of economiccycles • Realistic benchmarks • Free allocation based on real activity levels • A correct carbon leakageprotection is the catalyst forsustainable production and growth in Europe

  10. essenscia Federation of the chemical industry and life sciences VZW Contact: Els Brouwers Head of Climate and Energy T +32 2 238 97 08 ebrouwers@essenscia.be www.essenscia.be

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