Emissions Trading System

Our industry's opinion on ETS reform

The ETS Phase IV reform is an ideal opportunity to define a better-balanced and more predictable long-term regulatory framework for energy, climate and competitiveness.

Our industry recognises ETS as a cornerstone of European climate change policy. Implemented well, it will provide the most effective – and cost-effective - way to reduce carbon emissions. A robust ETS reform is also vital in letting us deliver the targets agreed during the Paris COP21 climate change conference in December 2015.

Why should the Council secure the proper level of compensation for an industry like aluminium?

In the light of European Parliament’s ENVI Committee vote, we encourage all national governments to improve the proposed indirect carbon compensation scheme. While the compromise adopted by the ENVI Committee shifts from a voluntary compensation system to the so-called hybrid model (i.e. EU centralized scheme combined with voluntary national top up), the maximum level of support suggested in the document is seriously threatening the future of the aluminium industry.

Read our updated position paper >

What we hope the reform will deliver

  1. Our main expectation is to benefit from a predictable and effective compensation system for indirect carbon costs.
  1. Benchmarks should be revised periodically, based on actual historic performance.
  1. Direct and indirect compensation mechanisms should be treated equally. They should be based on actual production and realistic benchmarks. They should exclude unrealistic automatic reduction factors based on caps, availability of allowances, etc.
  1. The principal criteria for eligibility for carbon leakage protection should be the sectors’ emission and electricity intensity and its ability to pass on costs into product prices.
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