EU plastic, textile and plywood industries win battle on CO2

Europe's plastics, textiles, plywood and cast iron makers won a battle on Friday to be spared the cost of buying permits for their climate warming emissions, European Commission documents showed.

Steel, aluminium, cement and glass had already been identified in earlier European Union discussions as the main industries that would get help in dealing with the cost of meeting European climate targets.

The EU agreed last year to cut carbon dioxide emissions to a fifth below 1990 levels by 2020, seeking to lead the world in combating climate change and the floods, drought and famine it is expected to bring. Its main tool to force industry to cut emissions is the Emissions Trading Scheme (ETS), which forces businesses to buy permits for the carbon dioxide they emit.

But heavy industries are battling hard to avoid paying for permits from 2013, saying the added cost will harm their ability to compete with overseas rivals, for example in India and China. They argue that if forced to pay, industry would migrate to outside the EU and there would simply be a geographical shift in where carbon is emitted in the production of goods for European consumption – so-called "carbon leakage". The same fight is being played out in the United States as it prepares its own emissions scheme.

"The sectors and sub-sectors judged at risk of carbon leakage are estimated to account for about 77 per cent of the total emissions from the manufacturing industry," the European Commission said in a statement.

A controversial decision over brick and roof tile manufacturers was deferred.

"Because of the weight of the product, and the high transport costs, bricks and roof tiles are not traded over long distances by road, and markets therefore tend to be regional," said a document.

That would suggest the sectors would not need shielding from competition from overseas rivals that do not have to carry the cost of cutting carbon. But officials close to the negotiations said Italy, Austria and Poland had put heavy pressure on the EU's executive to protect brick and tile makers by giving them free carbon permits, and the decision had been delayed pending further evidence.

The final decision will need approval by the European Parliament and the 27 EU member countries before becoming law.

 

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