The European Industry Associations listed below, as individual members
of the Alliance for a Competitive European Industry and the Alliance of
Energy Intensive Industries, support the overall EU Climate Change
objective and call for a workable EU ETS that maintains the
competitiveness of their sectors.

They urge the EU Institutions to include
the following provisions:
The EU ETS Directive recognises the need to identify through criteria the energy
intensive sectors exposed to international competition, as well as potential
solutions to mitigate carbon leakage and loss of competitiveness. The European
Parliament and the Council reinforced these concerns aiming at developing
improved criteria.

As the Trialogue seeks to conclude this very important legislation, the European
Industry Associations strongly urge for a fair and transparent treatment for all
ETS sectors based on objective analysis. Criteria and related thresholds should
be set and agreed by the Council and the EU Parliament so as to provide a
predictable framework for businesses to make both operational and investment
decisions.

The European Industry Associations accept the Cap and that the overall EU
20% target should not be compromised. However auctioning is not needed to
meet targets; it is an instrument not a goal.
Exposed sectors must qualify for performance-based free allocations linked to
ambitious benchmarks. This would incentivise the most efficient operators and
safeguard the achievement of the ETS emission reductions at significantly lower
unilateral costs to the EU economy. Benchmarks have been produced, and
should be set at such a level that allows for effectiveness and secures that
targets are met while preserving the competitiveness of the European industry.
We support the finalisation of objective and inclusive criteria with realistic
threshold values. We believe that the criteria most recently proposed by the
Council, building on EP ENVI Committee vote, improve the original proposal.

CERAME-UNIE

LIAISON OFFICE OF THE EUROPEAN

CERAMIC INDUSTRY

In particular, we support an integrated analysis of:

• The quantitative measure of either: direct and indirect carbon
intensity (kg/€) 1 , or the impact of the real direct and indirect costs of
CO2 on gross value added (€/€), which can also serve as an
approximation of profit margin. In this respect, we stress that the work
currently under way in the Commission, while based on relevant data,
does not assess the impact of the costs of CO2 versus Gross Value
Added. It still focuses on the costs of CO2 versus the prices of products,
which is inadequate to reflect the competitive risk to a sector.

• The exposure to international trade, provided the associated
methodology also considers effects throughout the whole value chain and
recognises that trade is dynamic, which is not yet included in recent
Commission’s papers. Future trade patterns and the likely impact of cost
increases due to CO2 on competitiveness and trade flows are indicators of
ability to pass on these costs and should also be examined.

Qualitative criteria (e.g. profit margin) that further enhance the analysis should be
included in the Directive. All our sectors are committed to provide the data
necessary to complete the assessments along those above lines.

Thresholds should be set in such a way that all sectors with a presumption
of risk based on either of the above criteria are included unless there is
clear evidence to the contrary. Realistic carbon price assumptions (including
sensitivity analysis with a price range well above 30€/tonne CO2) must be taken
as the basis for any evaluation of the risk of carbon leakage.

As a matter of fairness the level of auctioning for those sectors assessed as not
exposed should be reasonable (e.g. 20 %) and remain flat over the period.

In conclusion the European Industry Associations reiterate their demand to
be all treated in a fair and transparent manner within the EU ETS Directive.

They are ready and willing to assist further in the refinement of criteria,
methodologies and appropriate thresholds.

ACEA, representing the European Automobile Manufacturers
Ivan Hodac, Secretary General
CEFIC, representing the European Chemical Industry
Alain Perroy, Director General
CEMBUREAU, representing the European Cement Industry
Jean-Marie Chandelle, Chief Executive
CEPI, representing the European Pulp and Paper Industries
Teresa Presas, Managing Director
CERAME UNIE, representing the European Ceramic Industry
Renaud Batier, Managing Director
CIAA, representing the European Food and Drink Industries
Mella Frewen, Director General
CPIV, representing the European Glass Industry
Frédéric Van Houte, Secretary General
EULA, representing the European Lime Industry
Michelle Wyart-Remy, Secretary General
EUROALLIAGES, representing the Ferro-Alloy Industry
Ines Van Lierde, Secretary General
EUROFER, representing the European Steel Industry
Gordon Moffat, Director General
EUROMETAUX, representing the European Metals Industry
Guy Thiran, Secretary General
EUROPIA, representing the European Petroleum Industry
Isabelle Muller, Secretary General
EXCA, representing the European Expanded Clay Industry
Karin Gäbel, Secretary General
IFIEC Europe, representing the Industrial Energy Consumers
Hans Gruenfeld, President