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Publication of the preliminary list of sectors exposed to carbon leakage for the period 2021-2030

10 May 2018 | Markets

The preliminary list of the sectors considered to be exposed to the risk of carbon leakage, for the period 2021-2030, was published in the Official Journal of the European Union on May 8th, 2018.

The main difference observed in this list is the reduction to approximately half of the NACEs and PRODCOMs that are considered to be at risk of carbon leakage. Thus, compared to a list of around 180 sectors for 2015-2019, this new proposal reduces them to less than 80, the main sectors not including those associated with the manufacture of industrial machinery and vehicles.

In this preliminary list remain relevant sectors in the EU ETS, such as those dedicated to the manufacture of paper and cardboard, oil refining, chemical products, aluminum production, copper production or manufacture of basic products of iron, steel and ferroalloys, among others.

Despite the reduction in the number of sectors compared to the previous period, there are new additions proposed for 2021-2030. These sectors are: manufacture of veener sheets and wood-based panels, manufacture of industrial gases and manufacture of other non-metallic mineral products. The lignite industry may also request a qualitative or quantitative assessment to assess its final inclusion in the list of exposed sectors.

Of the 72 sectors proposed in this new list, only 44 will be considered to be at risk of carbon leakage without the need for a second assessment. In this way, about 30 NACEs and PRODCOMs will have the possibility of a second assessment for inclusion in the list. The justification to be provided will differ according to the carbon leakage indicator of the sector or sub-sector:

  • In cases where the carbon leakage indicator is between 0,15 and 0,2, a qualitative assessment may be requested and evidence of reduction potential, market characteristics and profit margins should be provided.
  • Sectors and sub-sectors with an emission intensity above 1.5 may request a qualitative assessment or a quantitative disaggregated assessment (Prodcom-6 or Prodcom-8).
  • Sectors and subsectors for which free allocation is calculated on the basis of the refineries benchmarks are also eligible to apply for both types of assessments.
  • The sectors and sub-sectors listed in the carbon leakage list for the period 2015-2020 at the Prodcom-6 or Prodcom-8 level may submit applications for a quantitative assessment at a disaggregated level.

These sectors and sub-sectors eligible for this second assessment must submit such justification to the European Commission within three months of the publication of this preliminary carbon leakage list.

 

 

Source: Factor CO2