EU chemical industry reacts to Winter Package: Markets, not targets will drive change

Date

30 Nov 2016

Sections

Climate & Environment

Press release

Brussels 30 November 2016 – Cefic, the EU chemical industry association, welcomes the ‘Winter Package’, launched today by the European Commission. After several liberalisation packages, the Commission now gives a new and significant push towards a truly functioning European energy market. Although this substantial package requires deeper examination, there are key headline issues to address today.

“It is markets, not targets that will drive change, said Marco Mensink, Cefic Director General. Many will react today on the level of ambitions. But that is not the core of the debate. We can only achieve goals if Europe’s energy markets are truly functioning. Connecting national markets, securing gas supply and integrating mature renewables into the grids are what counts to deliver secure sustainable and affordable energy for globally competing industries.”

This is where Europe can make a difference. The Commission should follow up to ensure that member states take action. Empowering the ACER agency that oversees this package and regular reporting by member states is crucial. It’s the member states that need to deliver and implement the changes required to succeed in supplying competitive low carbon energy to industry and consumers.

While many elements of the package are well designed, others are not - jumping from supporting renewables to supporting capacity payments being one case. Changing the rules for priority grid access for new installations reflects the more mature markets of today. This is the chance to make a big leap from state aid and capacity mechanisms to increasing support for future technologies that could change the game. The current level of support and the differences in support schemes between the member states urgently require new thinking.

This package represents a business opportunity for chemical companies. The Energy Performance of Buildings Directive, Energy Efficiency and Renewable Energy Directive will generate business opportunities for the European chemical industry. We manufacture products for energy savings, solar cells and windmills, insulation and lighter cars. The construction industry is the chemical industry’s second biggest customer, amounting to 8% of total chemical demand. Cefic stresses the importance of the circular economy of CO2 through the integration of carbon capture and utilisation (CCU) as an option for the future.

While ambitious plans can create market opportunities, overlapping regulations and targets do not. A single overall EU CO2 target remains the best way forward. Industry is already regulated through the EU Emission Trading System and the Industrial Emission Directive. The implementation of additional energy efficiency obligations in the EED will differ from country to country and distort competition.

As we carefully examine the package in depth, Cefic will provide more examination of what this important policy proposal will mean for Europe’s chemical industry for the mid- and long-term.

Reporters are welcome to contact Dervla Gleeson, Cefic Media Relations Manager for any further follow up: (dgl@cefic.be / Tel. + 32.2.676.72.89 / Mobile + 32.492.461.558)