The European Commission has published on 8th May 2018 in the Official Journal of European Union the preliminary list of the sectors considered to be exposed to the risk of carbon leakage, for the period 2021-2030.
Carbon leakage refers to the situation that may occur if, for reasons of costs related to climate policies, businesses were to transfer production to other countries with laxer emission constraints. This could lead to an increase in their total emissions. The risk of carbon leakage may be higher in certain energy-intensive industries.
To safeguard the competitiveness of industries covered by the EU ETS, the production from sectors and sub-sectors deemed to be exposed to a significant risk of carbon leakage receive a higher share of free allowances compared to the other industrial installations. The sectors and sub-sectors deemed to be exposed to a risk of carbon leakage are defined in an official list.
The difference in this 2021-2030 list is the reduction to approximately half of the NACEs and PRODCOMs that are considered to be at risk of carbon leakage. Therefore, compared to a list of around 180 sectors for 2015-2019, this new proposal reduces them to less than 80, the main sectors not including those associated with the manufacture of industrial machinery and vehicles.
The relevant sectors in the EU ETS, such as those involving manufacture of paper and cardboard, oil refining, chemical products, aluminum production, copper production or manufacture of basic products of iron, steel and ferroalloys, will remain in this preliminary list remain.
Regardless of the reduction in the number of sectors compared to the previous period, there are new additions proposed for 2021-2030. These sectors are: manufacture of veener sheets and wood-based panels, manufacture of industrial gases and manufacture of other non-metallic mineral products.
An important part of the sectors proposed in this new list will be considered to be at risk of carbon leakage without the need for a second assessment.
For further information consult the official document published by the European Commission, Commission Notice: Preliminary Carbon Leakage List, 2021-2030 (2018/C 162/01).