Originally posted at Corporate Europe Observatory (CEO)
The reform of the EU Emissions Trading System could hand more than €230 billion in subsidies to energy intensive industries, a new report from Corporate Europe Observatory shows.
The Emissions Trading System (ETS) is at the centre of EU climate policy, and a Directive currently passing through the European Parliament and Council intends to keep it that way until 2030. The EU ETS claims to make big polluters pay, but has actually become a way of enhancing polluter’s profits, as well as undermining and preventing effective action to tackle climate change.
- Some of Europe’s most polluting industries have been lobbying for a giveaway of more than €175 billion worth of pollution permits between 2021 and 2030, subsidies that amount to a carbon welfare scheme for big business, with ordinary citizens picking up the bill.
- Energy-intensive industries have lobbied hard for an EU-wide scheme to compensate them for electricity price rises caused by emissions trading. For example, aluminium producers have gained Italian government support for this scheme in the Council. The cost of these electricity subsidies could be anything up to an additional €58 billion – money that would prop up big polluters, rather than investing in the transformation to a cleaner economy.
- A report by Ian Duncan MEP, who plays a leading role on ETS reform in the European Parliament as rapporteur of the ENVI Committee, suggested a new loophole for offshore oil and gas producers that is worth €1.7 billion. Duncan has previously suggested that his “energy priorities” include opt-outs from emissions reduction targets for offshore installations, and ensuring that “the EU must not pass law that threatens Scotland’s oil and gas industry”.
- Over the last two years, the Climate and Energy Commissioners met business lobbyists seven times more than public interest groups to discuss emissions trading. Shell, ArcelorMittal, and Eurofer (European steel association) were the top lobbyists.
- Eurelectric (European electricity industry association) has argued strongly in favour of emissions trading, and recently came out for a tougher emissions reduction target than the Commission. But lobbyists for the big electricity firms are using emissions trading to defend against more effective policies to combat climate change. In particular, the Magritte Group has lobbied for energy efficiency targets and renewable energy support to be watered down in the name of defending the carbon price – while at the same time, lobbying for continued fossil fuel subsidies as part of the 2016 Winter Package.
- Eurelectric and electricity companies from central and eastern Europe have demanded the continuation of opt-outs (“article 10c”) and subsidies that have so far brought €12 billion worth of subsidies – mostly for coal power. The Greek public power corporation, with support from several MEPs, has lobbied for an opt-out that could result in over €1.7 billion in support for two new coal power plants.
- “Full spectrum lobbying” from Brussels associations, notably BusinessEurope and energy-intensive sectors, echoed by national federations and local companies has exerted considerable pressure on MEPs to extract more free subsidies from the ETS. They claim emissions trading could shift investment outside the EU and threaten jobs, although several studies have debunked this myth, with trade rules (combined with poor pay and conditions elsewhere) posing a far bigger threat to European industry.
All data in this executive summary are fully referenced throughout the report. Download the full report.