ECI’s Position on Carbon Leakage Qualification Criterion in the ETS

A qualitative assessment and a recognition that globally priced industries are unable to pass regional carbon costs are needed to ensure equal treatment for EU non-ferrous metals producers.

ECI understands that certain co-legislators are currently considering the removal of the qualitative aspect from the carbon leakage qualification.

Our paper seeks to outline to policymakers the “on the ground” impact that the qualitative assessment removal would have both for the non-ferrous metals sector and for the ETS itself (Negligible emissions reductions). It encourages policymakers to take into account the specificities of the copper sector and to recognize that globally priced commodities (i.e. metal price set by London Metal Exchange) cannot pass on their addition carbon costs.

The paper makes two recommendations to policymakers:

  1. Maintain the option for a qualitative assessment for carbon leakage qualification and protection
  2. Incorporate the “price-taker” market characteristics as a recognition that globally priced commodities cannot pass on their addition carbon costs.

Click here to download the paper.