EU ETS: Carbon leakage review data request - call for evidence
Detail of outcome
The call for evidence closed on 25 March 2013, following which data was submitted to the European Commission.
Original call for evidence
Call for evidence description
EU ETS Directive allows for those sectors deemed at significant risk of carbon leakage to receive free allocation of up to 100% of their benchmarked allocation. This is a significant source of relief as those sectors or sub-sectors deemed not at significant risk will be allocated 80% of their benchmarked allocation for free in 2013 declining annually to 30% in 2020 and 0% in 2027.
Sectors are considered through a process, led by the European Commission, which assesses whether sectors meet the criteria and thresholds set out in Article 10a of the EU ETS Directive. The list of sectors at significant risk of carbon leakage was last agreed in December 2009 and applies for the years 2013 and 2014. The list is reviewed every 5 years, with the next substantial review due to conclude in 2014.
The European Commission has issued a data request to Member States to allow them to determine the new carbon leakage list for the period 2015-2019 as required by Article 10a(14) of the EU ETS Directive.
The European Commission has much of the data needed for the assessment, but there are no official EU centralised sources containing data for electricity consumption (for EU ETS and non-EU ETS installations) or direct emissions data (for non-EU ETS) installations for the years 2008-2011. The European Commission have requested Member States provide this data to enable the assessment of carbon leakage status. For the UK to respond it is necessary to request this data from industry.
Action required
This call for evidence allows industry the opportunity to contribute to the European Commission’s assessment process. The call for evidence will close on 25 March 2013.
We ask that data is submitted according to the response template provided and through trade associations, unless companies contact us to discuss their individual circumstances. This will aid the data collation process and ensure we only receive data at the level of disaggregation required.
Definition
Carbon leakage is a term used to describe the prospect of an increase in global greenhouse gas emissions when a company shifts production or investment outside the EU because they unable to pass on the cost increases induced by the EU ETS to their customers without significant loss of market share, in the absence of an legally binding international climate agreement.