Europe’s energy-intensive industries, including metals producers, have raised concerns that demanding EU climate targets will damage their international competitiveness (ENDS Reports 389, pp 30-33 and 394, pp 36-39 ).
The Commission has recognised the threat in a communication on the competitiveness of the European metals industries and floats options for protecting them.1 Topping the list is the option of encouraging the sectors to develop international sectoral agreements that are "monitorable, verifiable, and subject to mandatory enforcement". It points out this approach will cut global emissions, not just the EU’s. The Commission wants to work with the industries to identify best practice methodologies on data collection and key performance indicators.
The other measure in the Commission’s toolbox is to continue free allocation of allowances to metals firms under the EU emissions trading scheme (EUETS). The Commission’s proposals for the scheme’s reform published in January would mean a gradual decline in free allowances from 2013, until 100% of allowances are allocated with auctioning by 2020 (ENDS Report 397, pp 47-48 ).
However, the Commission moots continuing free allowances to sectors that are particularly exposed to international competition. It will assess whether any metals sectors fall into this category. If they do, the Commission will look at the different efficiency of production techniques and processes being used to decide what proportion of allocations should be free.
Other options include acting to ensure that metals producers have access to competitively priced energy, promoting energy efficiency within the sectors and encouraging increased recycling.
Commission Vice-President Günter Verheugen said: "Metals industries have a vital contribution to make to the competitiveness of manufacturing industry and jobs in Europe, so it must be able to compete on a level playing field with their global competitors. Maintaining high levels of eco-efficiency and innovation will be crucial for their future success".