European Commission intensifies the conflict of goals between climate protection and competitiveness

Reform plans are a risk for growth

The VCI warns against considerable extra costs from the planned reform of the emission trading system. In Germany alone, the chemical industry could be faced with over 2 billion euros in such extra costs. According to the VCI director-general Utz Tillmann, the plans stand in contradiction to the European Council’s stance to maintain the competitiveness of EU industry vis-à-vis countries with no comparable climate protection regimes. Tillmann called upon the Commission to once more see the risk of production and investment relocations in a more serious light.

In an orientation debate on 26 October 2015 in Luxemburg, the Environment Council held the first discussion about the planned revision of the European Emission Trading System. VCI pointed out: The plans pose a risk to competitiveness and growth. - Photo: © European Union
In an orientation debate on 26 October 2015 in Luxemburg, the Environment Council held the first discussion about the planned revision of the European Emission Trading System. VCI pointed out: The plans pose a risk to competitiveness and growth. - Photo: © European Union

Against the backdrop of today’s orientation debate in the Environment Council, the German chemical industry association Verband der Chemischen Industrie (VCI) warns against considerable extra costs from the planned reform of the Emission Trading System (ETS). According to VCI director-general Utz Tillmann, the reform proposal by the European Commission does not follow the European Council requirement to protect industry against carbon leakage.

Tillmann said: “The Commission proposal intensifies the conflict of goals between climate protection and competitiveness of industry. The plans threaten to bring major additional burdens for the European chemical industry; this would weaken our international competitiveness. Companies would have to buy ever more allowances while allowance prices are rising. In Germany alone, the industry could be faced with over 2 billion euros in extra costs – costs that our competitors outside Europe do not need to pay.” In 2014 the European Council had decided to maintain the competitiveness of EU industry vis-à-vis countries without com-parable climate protection regimes. Now the Council should call upon the Commission to come up to this promise.

In more detail, Tillmann criticized several points of the Commission draft. For example, it is planned to cap the volume of free allowances available for industry. Furthermore, technical benchmarks would be tightened and thus the allocation of allowances would be reduced in a sweeping approach. Also, the criteria for the inclusion of sectors in the carbon leakage list would become so stringent that fewer companies could receive free allowances in sufficient amounts. The VCI director-general concluded: “With a number of tighter rules, the Commission wants to limit industry’s access to free allowances. These reform plans pose a risk to competitiveness and further growth. Our strongest global competitors outside the EU are not saddled with comparable burdens. At long last, the Commission should once more see the risk of production and investment relocations in a more serious light and bring about effective carbon leakage protection.”

Between 1990 and 2013 the chemical industry in Germany cut its greenhouse gas emissions by 49 percent while increasing its production by 60 percent over the same period of time.

More information

VCI's most important arguments and positions regarding the topic: "Competitive Energy: Bringing European Emission Trading in an Industry-Friendly Shape" PDF 141 Kb


The VCI represents the politico-economic interests of over 1,650 German chemical companies and German subsidiaries of foreign businesses. For this purpose, the VCI is in contact with politicians, public authorities, other industries, science and media.The VCI stands for over 90 percent of the chemical industry in Germany. In 2014 the German chemical industry realised sales of more than 190 billion euros and employed 444,800 staff.

Contact: VCI Press Dept., Phone: +49 69 2556-1496, E-Mail: presse@vci.de
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Contacts

Sebastian Kreth

E-Mail: kreth@vci.de