EU industry needs a framework that fosters innovation, and credible protection from carbon leakage at home and abroad 

With regards to this weekend’s decisive round of trialogues on the future of the Emission Trading System (ETS) and the switch to the Carbon Border Adjustment Mechanism (CBAM),

BusinessEurope Director General Markus J. Beyrer said: 

“To maintain the competitiveness of European industries, especially in the current acute multi-crisis, it is essential that negotiators strike a balanced deal on the ETS and CBAM. On CBAM, it is crucial that we have a comprehensive WTO-compatible solution for exporting industries, which maintains a fraction of free allowances to enable all exporters to compete on a level playing field with their international competitors. At the same time, we need a cautious and prudent approach to the gradual application of the CBAM until the mid-2030s; there is too much at stake to rush this process. In addition, adequate safeguards need to be in place in case the instrument fails to work as intended.” 

BusinessEurope is pushing for a trilogue result that will ensure that European companies are progressing towards their climate targets and are able to maintain their competitive position on the domestic and international markets at the same time. In addition to the measures laid out above this also includes easier access to support for innovation projects. However, there are some proposals on the table that would undermine the scaling-up of innovative company-wide solutions such as Carbon Capture, Storage and Utilisation (CCSU). Especially the plant-specific decarbonisation plans advocated by the European Parliament would impose a set of goals and demands on companies that is adding burden without clear environmental benefits. 

As it is expected that the new trading system for buildings and road transport (ETS BRT) will feature heavily in the discussions, BusinessEurope underlines that it is necessary for all sectors of society to take on their share of responsibility in the climate transition. Therefore, we urge negotiators to include private households in the scope of the ETS BRT as soon as possible (in concert with a suitably funded Social Climate Fund to address social equity concerns). 

To respond to the current energy crisis, and some of the additional needs for allowances due to the re-utilisation of previously dormant power plants, it is instrumental that the proposed one-off reduction of the emission cap is divided into at least two steps.

Date: 15.12.2022


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