Ref. Ares(2021)2584316 - 16/04/2021
Call –with European Energy Intensive Industries 24 and 29 March 2021
MINUTES
Ares(2021)2349494
to refineries. Many large new refineries are being built for export as well as domestic
demand, they are very highly integrated with chemicals. Highly competitive globally,
already causing shutdowns of refining in Australia and SE Asia.
• This will also affect European refineries, and businesses that are uncompetitive wil
struggle to make the green investments for transition. We have to remain competitive in
the transition.
• Industrial strategy should bring together the push measures for low carbon production
(funding breakthrough; facilitating competition law framework; ETS; CBAM Carbon
Border Adjustment Measure to preserve competitiveness) together with pull measures
to get low carbon products to market (financing; product standards; public
procurement).
• For transport fuels transition, getting the RED, Energy Taxation and also CO2 standards in
all transport modes are key. We welcome the announcement of the Alliance for
Renewable and Low Carbon Fuels and Value Chains.
3.
Fertilizers Sector
• Our sector can make a real contribution to the hydrogen strategy. Ammonia will be the
backbone of hydrogen economy.
• First project of green ammonia based on renewable energy will become operational in
Spain this year. Total investment needs for green ammonia are estimated to be more
than 30 bill. €. Moment no business case. Critical that public funds are made available to
support the transition.
• We need to create markets for green products, we need to have the definitions for
green products and certification in place
• Fertilizer sector is spoken about as a possible test sector for CBAM. We are only
interested in an ETS-mirror model, not an excise duty on carbon. Secondly, we insist that
free al owances should be continued, because we need security and competitiveness.
Otherwise we are not interested in being a test sector.
4.
Steel Sector
• EU steel industry hit very hard by the pandemic. We are stil suffering with sky-rocketing
raw material prices, and production certainly not reaching pre-pandemic levels this year.
• Yet, we maintain our ambition as steel industry to reduce emissions by 30% by 2030 –
approx. 55% compared to 1990 levels.
• We launched dozens of projects to bring our industry close to carbon neutrality by 2050.
• To be successful, we need full and effective carbon leakage protection. An equal cost
base between third country producers and EU operators is key.
• Free ETS allowances at current benchmark levels and CBAM can co-exist in a WTO
compatible way for a transition period.
• We are open to discuss any option of CBAM that provides us with full leakage protection.
But it is difficult for us to lend support to any of the design options on the table unless
Call –with European Energy Intensive Industries 24 and 29 March 2021
MINUTES
Ares(2021)2349494
we know exactly what the parameters are for each option and how these impact each of
our sectors; many of us have done the numbers and we would appreciate individual,
detailed industry discussions on the impact of each of the suggested approaches.
• The intent of CBAM from the very beginning was to fix a problem in ETS with asymmetric
application of carbon pricing to EU production vs. that of imports. Especial y considering
the levels of EU climate ambition and the rising ETS prices, it is a critical issue for us that
the COM deliver an instrument that improves, not worsens this situation.
5.
Cement
• “Fit for 55 package” – need for legal certainty: shift to carbon neutrality requires
massive investments in long-cycle businesses; need for a close coordination between al
the Fit for 55 + Industrial Policy + Sustainable Product policy initiatives is essential both
at EU level and at national level.
• ETS reform - need for fair burden sharing between ETS sectors and non-ETS sectors,
however, given the difference in pricing elasticity and cost pass-through possibilities
between ETS sectors and non-ETS sectors (transport and buildings) we do not believe
that the inclusion of the latter in the ETS would be a good option.
• Innovation - ETS revenues should be used to scale up breakthrough technologies and
innovative financing mechanisms such as Carbon Contracts for Difference that wil be
needed to make breakthrough technologies economically viable.
• A combination of push measures (incentivizing energy intensive industries to reduce
their emissions) and pull measures to ring low carbon products to the market
(standardization, public procurement, financing) is essential in a full value chain
approach.
6.
Non-Ferrous Metals Sector
• The Metals industry is very highly electro intensive. And so we are very dependent on
the power industry to deliver on these needs.
• Greater access to carbon free electricity at globally competitive prices is critical. It is the
biggest enabling factor for industry in the transition.
• We are very cautious regarding removal of free ETS allowances during introduction of
CBAM (especially Aluminium sector).
• We produce copper, zinc and nickel with a much lower carbon footprint that our non-
European competitors. We would like to see the Commission come with a regulatory
framework which provides a premium for these lower carbon products.
• We also have Raw materials challenge as Europe is only 20% self sufficient and many of
our products are critical for meeting the objectives of the Green Deal.
7.
Pulp & Paper Sector
• We need the Commission leadership in the bio-economy to positively influence
consumers’ behaviour and to promote bio-based, low-carbon products.
Call –with European Energy Intensive Industries 24 and 29 March 2021
MINUTES
Ares(2021)2349494
• Bio-mass also plays a critical role in the decarbonisation strategies of our mills. For mills
using recycled fibres without direct access to wood-based renewable energy, green
electricity and green gases will be crucial to maintain sustainable paper recycling in
Europe.
• CBAM is not likely to work for all sectors as pulp and paper sector relies on exports.
Conclusion and next steps
The Commissioner proposed for technical level discussion on CBAM options and thanked
EI s’ representatives for the exchange and suggested to continue dialogue, including through
the high Level Group on EI s and directly with his team.
