EP event: ‘Inclusion of consumption of carbon intensive materials in the EU ETS’

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Climate Strategies and Jens Geier MEP hosted an event in the European Parliament, Brussels, on Tuesday May 24 2016, for our project ‘Inclusion of Consumption of Carbon Intensive Materials in the EU ETS‘.

Speakers: Jens Geier MEP (S&D), Prof. Karsten Neuhoff, DIW Berlin and Climate Strategies

Responses from: Carl de Mare, Head of Emerging Technology Development, Arcelor Mittal;  Rob van der Meer, Director Public Affairs, Heidelberg Cement; Sam Van Den Plas, Climate and Energy Program, WWF.

The debate on the future of the European Union’s Emissions Trading System (ETS) is in full swing. It will determine whether EU ETS can support innovation and investment opportunities in production and use of materials. Discussions to date are however largely focused on how to structure free allowance allocation to avoid the risk of carbon leakage.

The Paris Agreement on climate change, agreed in December 2015, means countries need to prepare a low-carbon transition for their economies. This requires stronger action than is currently planned, but also creates new policy opportunities. In particular, Europe could now consider the inclusion of consumption of carbon intensive materials in the ETS in addition to the upstream coverage of emitting installations. This would replicate similar systems China and Korea have implemented for their power sector. Thus incentives for investment and innovation in materials production and use could be aligned with carbon leakage protection.

The research network Climate Strategies has convened 17 international research partners led by DIW Berlin to analyse whether and how this can be implemented in practice. Legal and administrative assessments show that inclusion of consumption of carbon intensive materials can be aligned with existing procedures of public and private actors. The consumption-based approach also avoids WTO and political challenges with trade-related measures. Thus it offers a promising option for the further development of ETS mechanisms. Whether, when and how this would become an element of EU ETS shall be the subject of the debate.

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Agenda

7:30          Accreditation-Security Check

8:00          Welcome by Jens Geier MEP (S&D) and Host

8:10          Presentation of study: Prof. Karsten Neuhoff, DIW Berlin and Climate Strategies

8:30          Response: Carl de Mare, Head of Emerging Technology Development, Arcelor Mittal

8:35          Response: Rob van der Meer, Director Public Affairs, Heidelberg Cement

8:40          Response:  Sam Van Den Plas, Climate and Energy Program, WWF

8:45          Discussion

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For more information about the project, please visit our project web page.

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