ETS 3rd phase

Brussels 23/01/08 – CEMBUREAU, the European Cement Industry Association, welcomes the measures, now written in the proposed Emission Trading Directive, in respect of energy intensive industries (EII) which are open to international competition and where there is a risk of carbon leakage for the period post 2012.  

The European cement industry meets those two conditions.  We are, therefore, very surprised to read in the document accompanying the package of implementation measures for the EU’s objectives on climate change and renewable energy for 2020 that ‘the cement sector is unlikely to be significantly exposed to international competition due to high transportation costs, although there is a marked increase in trade in the Mediterranean basin […]. The competitiveness problem for energy intensive industries therefore only appears to be concentrated in a limited number of genuinely energy intensive industries while not generally affecting manufacturing industry as such’ with reference to a study produced by ECFIN¹. 

CEMBUREAU has consistently drawn the European Commission’s attention to the following facts which the quoted study disregards:     ̀

• Whilst it may be true that, as a general rule, cement transportation on land is limited to a 300 km radius, this applies only to land transportation.    ̀
• The risk of carbon leakage results from cement and clinker shipments over long distances by sea from countries with no carbon constraints such as China.
• There is currently an extraordinary increase in the volumes of cement and clinker being imported to European ports, sea terminals and grinding stations from countries which do not bear the burden of carbon constraints, resulting in carbon leakage, as well as an increase in CO2 emissions from shipments. Transporting cement from China to Europe adds 10.9% to the CO2 emitted by the production of the imported under European production standards. Shipping cement in the Mediterranean area adds 19.7% to the CO2 emitted by the production of the imported tonnages under European production standards. 

Cement will continue to be needed in Europe for decades to come.  However, with a CO2 cost of 40€ per tonne of cement for a product sold on average for around 70€ per tonne, how would the European cement industry compete with products imported from countries with no carbon constraints such as China? 

As demonstrated by official Eurostat statistics and CEMBUREAU estimates (see attached), it is clear that there is not only a very real risk of carbon leakage in our industry, but that carbon leakage is already occurring. 

CEMBUREAU invites the European Commission to an open dialogue on this issue and hopes that facts will be taken into account well before the 2011 decision on the allocation of allowances for energy intensive is due to be made.