[ParlTrack]

Proposal for a directive – amending act
Recital 18

(18) Transitional free allocation to installations should be provided for through harmonised Community-wide rules ("benchmarks") in order to minimise distortions of competition with the Community. TWithout prejudice to sector specific criteria these rules should take account of the most greenhouse gas and energy efficient techniques, substitutes, generally applicable alternative production processes, use of biomass, renewables and ~~greenhouse gas capture and storage~~the potential including the technical potential to reduce emissions. Any such rules should ~~not~~ give incentives to indecrease ~~emissions and ensure that an increasing proportion of these allowances is auctioned. Allocations must be fixed prior to the trading perio~~specific emissions. Allocations based on benchmarks must be fixed so as to enable the market to function properly . They shall also avoid undue distortions of competition on the markets for electricity and heat supplied to industrial installations. These rules should also apply to new entrants carrying out the same activities as existing installations receiving transitional free allocations. To avoid any distortion of competition within the internal market, no free allocation should be made in respect of the production of electricity by new entrants~~. Allowances which remain in the set-aside for new entrants in 2020 should be auctioned.~~ , with the exception of electricity produced from waste gases from industrial production processes. Allowances which remain in the set-aside for new entrants in 2020 should be auctioned. In defining the principles for setting benchmarks in individual sectors, the Commission should consult with the social partners of the sectors concerned.

2008/06/23
Committee: ITRE

Hannes SWOBODA

Proposal for a directive – amending act
Recital 19

(19) The Community will continue to take the lead in the negotiation of an ambitious international agreement that will achieve the objective of limiting global temperature increase to 2°C and is encouraged by the progress made in Bali towards this objective. In the event that other developed countries and other major emitters of greenhouse gases do not participate in this international agreement, this could lead to an increase in greenhouse gas emissions in third countries where industry would not be subject to comparable carbon constraints (“carbon leakage”), and at the same time could put certain energy- intensive sectors and sub-sectors in the Community which are subject to international competition at an economic disadvantage. This could undermine the environmental integrity and benefit of actions by the Community. To address the risk of carbon leakage, the Community will allocate allowances free of charge up to 100% to sectors or sub-sectors meeting the relevant criteria, depending on the risk of carbon leakage. Based on the potential for a significant loss of market share to installations outside the Community not taking comparable action to reduce emissions, a list of energy intensive industry sectors exposed to the risk of carbon leakage should be attached as an Annex to this Directive. The Community will continue to allocate allowances free of charge to sectors or sub-sectors meeting the relevant criteria which determine carbon leakage risk. The definition of these sectors and sub-sectors and the measures required will be subject to re-assessment to ensure that action is taken where necessary and to avoid overcompensation. For those specific sectors or sub-sectors where it can be duly substantiated that the risk of carbon leakage cannot be prevented otherwise, where electricity constitutes a high proportion of production costs and is produced efficiently, the action taken may take into account the electricity ~~consumption in the production process, without changing the total quantity of allowances~~.

2008/06/23
Committee: ITRE

Robert GOEBBELS, Françoise GROSSETÊTE, Philippe BUSQUIN, Hannes SWOBODA

Proposal for a directive – amending act
Recital 20

(20) The Commission should therefore review the situation by June 2011 at the latest, consult with all relevant social partners, and, in the light of the outcome of the international negotiations, submit a report accompanied by any appropriate proposals. In this context, the Commission should identify whichIn order to ensure the efficiency of the European emission allowance trading system and prevent European restrictions from prompting industry to move to countries with less stringent environmental restrictions - preventing a decrease in global emissions - energy- intensive ~~industry~~ sectors orand sub-sectors ~~are likely to be subject to carbon leakage not later than 30 June 2010. It should base its analysis on the assessment of the inability to pass on the cost of requ~~subject to international competition need to introduce an efficient system enabling Community installations to be placed on the same footing as thired ~~allowances in product prices without significant loss of market share to~~country installations, inter alia by subjecting importers to requirements comparable to those set by European Union installations ~~outside~~through the Ccom~~munity not taking comparable action to reduce emissions. Energy-intensive industries which are determined to be exposed to a significant risk of carbon leakage could receive a higher amount~~pulsory surrender of allowances. This mechanism is intended for use only vis-à-vis countries which, following an international agreement, in the case of developed countries, have failed to give undertakings comparable to those assumed by the European Union in terms of fgree allocation or an effective carbon equalisation system could be introduced with a view to putting installations from the Community which are at significant risk of carbon leakage and those from third countries onhouse gas emission reduction or, in the case of emerging countries, have failed to introduce new and appropriate actions which are measurable, reportable and verifiable in a cco~~mparable footing. Such a system coul~~rdance with the road mapply requirements to importers that would be no less favourable than those applicable to installations within the EU, for example by requiring the surrender of allowances. Any action taken would need to be in conformity with the principles of the UNFCCC, in particular the principle of common but differentiated responsibilities and respective capabilities, taking into account the particular situation of Least Developed Countries. It would also need to be in conformity with the international obligations of the Community including the WTO agreement adopted at the Bali Conference. The Commission should identify sectors likely to be subject to carbon leakage on the basis of highly specific criteria so as to ensure that the risk of carbon leakage is properly estimated and to avoid any over- compensation. The border adjustment mechanism should be consistent with the Community’s international obligations, particularly as regards the WTO.

2008/06/23
Committee: ITRE

Hannes SWOBODA

Proposal for a directive – amending act
Recital 20

(20) The Commission should therefore review the situation by June 2011 at the latest, consult with all relevant social partners, and, in the light of the outcome of the international negotiations, submit a report accompanied by any appropriate proposals. In this context, the Commission should identify which energy intensive industry sectors or sub-sectors are likely to be subject to carbon leakage not later than 30 June 2010. It should base its analysis on the assessment of the inability to pass on the cost of required allowances in product prices without significant loss of market share to installations outside the Community not taking comparable action to reduce emissions. Energy-intensive industries which are determined to be exposed to a significant risk of carbon leakage could receive a higher amount of free allocation or an effective carbon equalisation system could be introduced with a view to putting installations from the Community which are at significant risk of carbon leakage and those from third countries on a comparable footing. Such a system could apply requirements to importers that would be no less favourable than those applicable to installations within the EU, for example by requiring the surrender of allowances. Any action taken would need to be in conformity with the principles of the UNFCCC, in particular the principle of common but differentiated responsibilities and respective capabilities, taking into account the particular situation of Least Developed Countries. ItThe issue of securing raw materials supplies in the European Union should also be taken into account. Action taken would also need to be in conformity with the international obligations of the Community including the WTO agreement.

2008/06/23
Committee: ITRE

Hannes SWOBODA

Proposal for a directive – amending act
Article 1 – point 2 – point c

Directive 2003/87/EC
Article 3 – point u a (new)

(ua) ‘Sectors exposed to a significant risk of carbon leakage’ means sectors identified in accordance with the criteria set out in Article 10a(9) and listed in Annex 1a.

2008/06/26
Committee: ITRE

Hannes SWOBODA