Opinion of the ECSC consultative Committee on the European climate change programme and emissions trading (adopted unanimously at the 355th session of 5 April 2001)
Date: 2001-04-05
Institutions: Consultative Committee of the European Coal and Steel Community
Subjects: ECSC, EU programme, climate change, tradeable emission permit

C 170/8

EN

Official Journal of the European Communities

14.6.2001

Opinion of the ECSC consultative Committee on the European climate change programme and
emissions trading

(adopted unanimously at the 355th session of 5 April 2001)

(2001/C 170/04)

THE CONSULTATIVE COMMITTEE OF THE EUROPEAN COAL AND
STEEL COMMUNITY,

signatories and in the absence of harmonisation at
Community level.

HAVING REGARD TO:

(cid:151) the Commission’s Green Paper on greenhouse gas emissions

trading within the European Union (1), and

(cid:151) the Communication from the Commission to the Council
and the European Parliament on EU policies and measures
to reduce greenhouse gas emissions: Towards a European
climate change programme (ECCP) (2),

(cid:151) its Declaration on the role of coal in the Europe of the 21st

century, adopted on 25 June 1999,

IS OF THE OPINION THAT:

that, when applying

the precautionary
1. Considering
principle,
the lack of certainty should not delay the
adoption of efficient and proportional measures, with an
economically acceptable cost, aiming at preventing the risk
of major and irreversible damage to the environment, the
Consultative Committee welcomes
the Commission’s
initiative to launch a discussion on a European climate
change programme,
to study the establishment of a
trading system for greenhouse gas emissions and to
consult all economic players by means of a Green Paper.
In this respect, the Community’s processing industry has
declared its willingness to contribute in a constructive
manner to the limitation of greenhouse gas emissions.
the Consultative Committee wishes to stress
However,
that
is a
the fight against greenhouse gas emissions
worldwide problem requiring a global solution. For the
is demanded only from the
time being,
the Kyoto Protocol. The
countries
Protocol does not require any effort from the developing
countries,
already
even though some of
important sources of greenhouse gas emissions.

an effort
in Annex B of

them are

2. The implementation of the Kyoto Protocol will, however,
It is
place a considerable burden on the EU economy.
therefore
some
that
Member States have already started placing burdens on
industry in advance of the Protocol’s ratification by all

the governments of

regrettable

(1) COM(2000) 87 final.
(2) COM(2000) 88 final.

3. After ratification, the Protocol should be implemented by
the EU and its Member States in such a way that its drag
on the EU’s economy is minimised. The Kyoto (cid:145)flexible
mechanisms(cid:146)
efficient
offer
routes
the national GHG
for
reduction commitments, particularly when there are no
restrictions on their use.

achievement of

economically

potentially

the

4. It is clear that policies to achieve the Kyoto commitments
to conflict with other EU policy
have the potential
objectives. The Consultative Committee is particularly
concerned about
the relationship between the Kyoto
process and EU energy policy and the need to maintain
and improve EU manufacturing competitiveness.

5. It is thus vital that implementation of the Kyoto Protocol
should not compromise the energy policy objectives of
the
security, sustainability and diversification. Moreover,
Commission should support and promote the development
of clean coal technology, as this is a way of reducing GHG
emissions while at the same time preserving the security of
energy supplies by enabling one of the EU’s traditional
energy resources to continue to be exploited.

6. EU manufacturing industry,

including the steel

industry,
operates in global markets. Certain types of economic
instrument, particularly energy taxes, have the potential
to undermine manufacturing competitiveness. This will
destroy EU jobs, with manufacturing activity migrating to
these
third countries where costs are lower. Many of
countries will not be Kyoto signatories. The taxation of
the business use of energy within the EU therefore risks
increasing GHG emissions elsewhere in the world.

7. The EU steel industry, being energy-intensive, has always
had a strong incentive to improve its energy efficiency. It
has accordingly reduced its specific energy consumption by
almost half since 1975. Steelmaking processes have been
developed and refined over a very long time, resulting in
limit. There is
energy efficiency close to the theoretical
therefore little room for
improvements, which
would in any case involve costs bordering on the limits
of profitability. Any measures or targets aimed at speeding
up the process of continuous improvement are therefore
unlikely to have any appreciable effect. Major reductions in
process emissions will require step changes in technology,
development of which has a 20- to 30-year timescale.

further

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Official Journal of the European Communities

C 170/9

achieving Kyoto compliance. The

8. The energy and manufacturing sectors should not be
the
expected to shoulder a disproportionate share of
burden of
fastest
growing source of GHG emissions is the transport sector.
It is absolutely vital that the EU pay greater attention to
the need for reduced emissions from this sector. In this
context, it is noted that the steel industry has contributed
to lower energy consumption in the transport sector
through
steels,
although these steels themselves require more energy to
produce.

lighter-weight

development

the

of

9. Thus in addressing the global climate change problem, the
Commission should look at the full life cycle impacts of
energy sources and not concentrate solely on emissions at
the point of use. As the EU becomes more dependent on
imported energy, full account must be taken of emissions
and energy use outside the EU associated with energy
supply to the EU.

(ACEA)

10. While welcoming inter alia the positive contribution that
the voluntary agreement by the European automotive
energy
reducing
producers
the Consultative
consumption
by motor
Committee nevertheless expressly notes
through
reductions in coal output and/or use, the ECSC industries
have already made a major contribution to reducing GHG
emissions in the EU.

to
vehicles,

can make

that,

11. In adopting appropriate measures to encourage improved
energy efficiency by the domestic sector, the EU and its
Member States should avoid any measures that risk exacer-
bating fuel poverty.

12. The application of the Kyoto (cid:145)flexible mechanisms(cid:146) should
not be restricted to emissions trading.
Joint implemen-
tation (JI) and the clean development mechanism (CDM)
appear to be particularly well suited to promoting the
worldwide application of modern energy-use technology,
in which Europe leads. The application of JI and CDM
ensures the enhancement of energy efficiency in those
countries where it will be possible at
the lowest cost.
They thus provide the means to achieve global emissions
reductions while minimising costs. The Consultative
Committee therefore urges the Commission to take a
lead in negotiating a global framework for the implemen-
tation of JI and CDM. It is also essential that the rules on
emissions trading should be compatible with those for JI
and CDM.

13. The Consultative Committee regrets that the Green Paper
appears dismissive of the role that (cid:145)sinks(cid:146) (such as forests,
growth in agriculture and the deep oceans) can play in the
absorption of CO2, and calls for a more rigorous scientific
evaluation of their impact.

14. Emissions trading systems should remain the responsibility
of the Member States. In principle, emissions trading at
national level should not be harnessed to existing climate
policy measures, but should create more cost-effective
alternatives which are less of a burden on the economy.
In those Member States which are already carrying out

via

the

(e.g.

trading,

energy-saving obligations)

measures resulting in a de-facto allocation of emission
rights
early
implementation of trading systems can make a significant
contribution to minimising the negative
effects on
competitiveness. Emission rights which have to be paid
for, and which have the same effect on the companies
concerned as a CO2 tax,
for example (cid:151) or an even
is required. How
more serious effect (cid:151) are not what
emissions
instrument,
should be used depends largely on whether emission
rights are allocated fairly,
in particular on whether due
account
is taken of adjustments already made, and on
the climate policy approach already adopted by the
Member State in question, taking into account its specific
economic and social structures. If, against this background,
Member States
an
emissions trading system, the Consultative Committee has
the following observations to make on the design of such a
system:

as only one possible

recommend the

introduction of

14.1. The EU’s compliance with commitments entered
into as a result of the Kyoto Protocol has been
delegated to the Member States, which are them-
selves evolving a range of differing measures. For
example, each Member State has adopted a different
GHG reduction target, and is
free to decide
autonomously on the best balance of instruments
It would
to be adopted for achieving its target.
therefore be extremely difficult to develop a single
EU emissions trading scheme.

14.2. The Commission should

ensure

instead

that
national emissions trading schemes are compatible
with each other, to make intra-EU trading possible.
This should apply, in particular, to the methodology
adopted for the calculation of permits and targets.
Without such compatibility it would be difficult to
calculate the relative value of permits within each
scheme. Common rules should also be adopted, and
care should be taken that the fixing of targets does
not create a distortion of competition.

14.3. For the sake of greater transparency, a bourse should
be established to enable trading to take place
the
between national schemes,
differing targets adopted by each Member State
would be likely to result
in national emissions
permits developing different relative values.

recognising that

14.4. The Commission should develop,

in full consul-
tation with industry and employee organisations,
guidelines within the context of
the State aid
the allocation of permits
rules
within national trading schemes does not distort
competition.

to ensure that

systems

14.5. The framework set up in the EU to ensure that
national
be
are
sufficiently flexible to give companies the right to
participate in trading schemes, where appropriate.
The participation of companies should be purely
voluntary.

compatible

should

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Official Journal of the European Communities

14.6.2001

14.6. The Consultative Committee does not consider the
integrated pollution prevention and control or large
combustion plant Directives
as being suitable
means of determining sectoral eligibility for a
trading
trading scheme.
should be open to any sector which chooses to
join.

In principle, emissions

14.7. Auctioning permits is unacceptable, as this would
simply impose another irrecoverable cost burden
on EU manufacturing, with no environmental
benefit. Targets must
take account of both the
degree of energy efficiency already achieved and
the scope for future improvements. (In countries/
sectors where
efficiency
agreements apply, the allocation of permits should
relate to the agreed targets.)

negotiated

energy

in order

to minimise

the initial allocation of permits is
14.8. The issue of
distortion of
crucial
competition, and several systems are available.
It
needs to be recognised that, whichever allocation
method is used,
it will never be totally fair,
otherwise there would be no reason for trading.
allocation system should
However,
the
avoid any severe economic dislocation or

initial

the

strangling of investment to industry, and provide
sufficient liquidity to the permit market.

14.9. Targets and the emissions trading system should not
be so defined as to inhibit the expansion of EU
manufacturing in terms of
either volume or
increased added value.

14.10. Any maximum values for CO2 emissions must take
into account
the additional energy consumption
caused by regulatory requirements to reduce other
emissions.

14.11. The banking of emission rights for use in later years

should be possible.

international emissions

15. EU trading must, where appropriate, be made compatible
with a comprehensive,
trading
system and the other flexible Kyoto instruments and be
able to include as wide a range of
third countries as
possible without serious complications or delays. This
include the need for a common global system for
will
measurement, monitoring, reporting and verification. The
fact that some EU Member States are proceeding with
Kyoto implementation in advance of other signatories
will make it more difficult to achieve such compatibility.

Opinion of the ECSC Consultative Committee on the proposal for a Council Directive restruc-
turing the Community framework for the taxation of energy products

(adopted unanimously at the 355th session of 5 April 2001)

(2001/C 170/05)

1. THE CONSULTATIVE COMMITTEE OF THE EUROPEAN COAL

AND STEEL COMMUNITY,

1.1. referring to its Resolution on the proposal submitted
by the European Commission for a Council Directive
restructuring the Community framework for
the
taxation of energy products (1);

1.2. stressing

its

fundamental

any
attempt by the EU Member States unilaterally to
taxes, which would make
introduce
European firms less competitive internationally;

reservations

ecological

about

1.3. with reference to the considerable efforts which the
industry has made over the past few
coal and steel
decades, and more particularly in recent years, in the
field of environment policy;

1.4. with reference

a

to the

(cid:145)Towards

recommendation of

the security of energy supply(cid:146) (2)

the
European
Commission Green Paper
to
strategy for
increase energy taxes in the EU and to resume the
for a Directive of 1997,
discussion on the proposal
and with a view to the request for additional
(cid:145)fiscal
measures(cid:146) contained in the Communication from the
action
sixth
the
Commission
programme of the European Community (3).

environment

on

2. REQUESTS THAT,

IN THE DISCUSSIONS CONDUCTED BOTH
WITHIN THE COMMISSION AND IN THE MEMBER STATES,
PARTICULAR ACCOUNT BE TAKEN OF THE FOLLOWING:

2.1. the need to avoid distortions of competition in the field
of energy resulting from an approach to energy
taxation which is insufficiently coordinated between
Member States and industrial sectors;

(1) OJ C 356, 22.11.1997, p. 3.

(2) COM(2000) 769 final.
(3) COM(2001) 31 final.