Fédération belge des industries chimiques et des sciences de la vie
essenscia
Essenscia represents Belgian chemical and life sciences industries, providing services to members and promoting the sector to the public.
Lobbying Activity
Meeting with Anna Nykiel-mateo (Cabinet of Executive Vice-President Stéphane Séjourné)
16 Dec 2025 · Belgian Life Sciences Industry Association requested the meeting to exchange on the upcoming Biotech Act II.
Response to European Climate Law amendment
16 Sept 2025
Europes chemical and life sciences industry faces structural challenges from high energy costs, regulatory uncertainty, and declining competitiveness. A -90% emissions target by 2040 risks irreversible deindustrialization, as it is misaligned with innovation cycles and industrial investment horizons. essenscia supports climate neutrality by 2050 but calls for a realistic 2040 trajectory reflecting technology readiness and diffusion. The target must be conditional on enabling factors: competitive energy prices, infrastructure, predictable regulation, and adequate ETS flexibility. A balanced, innovation-driven pathway is essential to achieve climate goals while safeguarding Europes industrial base. Please see our position attached.
Read full responseResponse to Technical updates of the Emissions Trading Scheme (ETS) State aid guidelines
5 Sept 2025
The Belgian chemical and life sciences industry continues to face severe economic headwinds. Capacity utilization has dropped to just 67.4%, which is 6 percentage points below the long-term average. This low level has persisted for three consecutive years and, at present, there are no signs of improvement on the short term. This reflects a structural downturn driven by, among other, persistently high energy costs, regulatory and political uncertainty, excess low-cost production capacity outside Europe, trade tariffs and a lack of targeted investment incentives. This decline is further intensified by direct CO2 emissions costs and indirect CO2 emissions costs that are passed on in electricity prices, significantly impacting competitiveness and increasing the risk of carbon leakage. Non-European industries do not bear these costs, exposing European industry to unfair competition from imports that lack embedded indirect CO2 costs. Including the chemical sector in the ETS State Aid Guidelines is essential to support its low-carbon transition while maintaining competitiveness and preventing carbon leakage. The 2020 review unjustly excluded certain chemical subsectors from receiving compensation for indirect carbon costs. Nonetheless, the Chemical industrys Action Planwhich opens the possibility for other chemicals to be added as beneficiaries of ETS-related state aid are encouraging developments signalling progress in the right direction. essenscia welcomes therefore the opportunity to provide feedback on the updates of the ETS state aid guidelines. essenscia recommendations on needed improvements of the state aid guidelines for the ETS State aid guidelines can be found in the attached paper.
Read full responseBelgian chemical industry demands affordable power in grid package
4 Aug 2025
Message — The federation calls for strategic grid expansion focused on industrial clusters and voluntary flexible connection agreements. They also request a modification of rules to prioritize industrial projects over more flexible installations.123
Why — The proposed measures would reduce the financial burden of electrification and secure energy access.45
Impact — Data centers and renewable energy developers may lose priority access to grids in strategic zones.6
Belgian chemical industry backs climate contribution for low-carbon goods
8 Jul 2025
Topic — Consultation on measures to stimulate investment and demand for decarbonised industrial products.
Message — Essenscia requests a climate contribution on final products to incentivize low-carbon purchasing. They also propose using VAT reductions and tax breaks to bridge price gaps.12
Why — This approach generates new revenue streams to offset expensive low-carbon infrastructure investments.3
Impact — Non-EU importers and consumers of carbon-intensive goods face higher costs and contributions.4
Belgian chemical industry urges ETS reforms to protect competitiveness
7 Jul 2025
Message — essenscia calls for an immediate freeze of the Market Stability Reserve to avoid de-industrialization. They request a slower emissions reduction trajectory that aligns with industrial innovation curves. The group demands more robust carbon leakage protections and higher free allowance budgets.123
Why — These reforms would lower compliance costs and preserve the sector's global market position.4
Impact — Environmental groups lose because stopping the invalidation rule prevents reducing the long-term emissions cap.5
Meeting with Olivér Várhelyi (Commissioner) and
20 May 2025 · EU biotech policy
Meeting with Rainer Becker (Director Health and Food Safety)
8 May 2025 · Panelist at Knowledge for Growth conference in the "Biotechnology in the European spotlight: an enabling Biotech Act for a healthy future" debate
Meeting with Ivo Schmidt (Acting Head of Unit Energy)
22 Apr 2025 · Meeting the Board of Directors of Essenscia
Meeting with Olivier Chastel (Member of the European Parliament)
6 Mar 2025 · Biotech - Politique de santé de l'UE
Belgian chemical industry demands better recognition for carbon capture
28 Jul 2024
Message — Essenscia urges the Commission to recognize CO2 avoidance from all sources, including zero-rated fuels. They request broader definitions for carbon-capture products and the removal of gas grid connection requirements.123
Why — The industry would benefit from reduced carbon costs and greater flexibility in fuel sourcing.4
Belgian chemical industry seeks flexible carbon capture storage rules
16 Jul 2024
Message — Essenscia wants carbon storage rules to reflect product function rather than strict century-long timelines. They also demand that carbon-captured materials be treated the same as fossil alternatives during disposal.123
11 Apr 2024
essenscia would like to comment on the following topics The draft proposal is laying down some of the principles that may apply for the revision of the Food Contact Regulation, EU 1935/2004, covering the circular economy and the arising concerns among which the concept of high purity from which derogations will be allowed incidental contamination from waste the return and reuse of materials after forming but before consumption in a final product or by an end user. the reuse of materials after forming and not shipped to a third party for further processing the migration of intentionally added substances like inks or glues, when recycling and reprocessing a material out of waste The 18th amendment is also considering the impacts of the child legislation EU 2022/1616, on recycled plastic materials and articles intended to come into contact with foods, and repealing Regulation (EC) No 282/2008. The draft proposal is also attempting to create a bridge between the Food Contact regulation framework, FCM, the Waste Framework Directive, WFD, and related legislations and the Packaging and Packaging Waste Regulation, PPWR.
Read full responseResponse to Measures to reduce microplastic pollution
17 Jan 2024
We would like to address some comments on Recital 1 on Ubiquity, risks and hazard, Recital 3 on Handling, Recitals 9 & 11 on Waste, Recital 27 on EMAS, Recital 38 on Non Compliance and Recitals 40 & 41 on Damage to human health Consequently we suggest relevant amendments on Article 2 Definitions (Plastic pellet, Spills and primary containment and Installation), Article 3 General Obligations, Article 4 Obligations regarding the handling of plastic pellets and on Article 6 exemption for Environmental Management Systems. Last but not least, we would like to draw the attention of the EC, the EP and the stakeholders on the impacts of the Packaging and Packaging Waste Regulation on the requirements of this regulation.
Read full responseResponse to Amendment of the free allocation rules in response to the ETS revision/Fit For 55
2 Jan 2024
essenscia considers an adequate carbon leakage framework crucial to allow industry reduce GHG emissions while remaining competitive in a global context. essenscia therefore welcomes the opportunity to provide feedback on the Commission draft Delegated Regulation amending Delegated Regulation (EU) 2019/331 as regards transitional Union-wide rules for harmonised free allocation of emission allowances (FAR). As a result of the revision of the EU ETS Directive in 2023, the EC proposed several updates on the rules for the allocation of free allowances. essenscia recognises the stakeholder consultation in the process of drafting the update of the FAR and the effort to integrate some important critical elements raised. For example essenscia welcomes the recognition of electrification in the production of heat thereby supporting the production of low carbon heat by electric boilers of heat pumps. Also essenscia appreciates that the current proposals brings the energy efficiency conditionality in line with the 4 years cycle as stipulated in the Energy Efficiency Directive. To limit administrative burden essenscia would recommend that voluntary arrangements already existing in Member States and meeting the pay back criterium, also qualify as compliance for this conditionality. Nevertheless some critical concerns still exist, specifically on the conditionality rules (CNP and energy efficiency), the deletion of exchangeability of fuel and electricity, fallback benchmarks, deletion of the de-minimis rule. Attached our position paper focusing on these critical points important for the sector of the chemical industry in Belgium.
Read full responseBelgian Chemical Industry Calls for Support for Carbon Capture Technologies
31 Aug 2023
Topic — The EU is consulting on a strategic vision for deploying carbon capture, utilization, and storage.
Message — The federation requests a framework recognizing industrial carbon removals for compliance within the Emissions Trading System. They advocate for technology neutrality and EU-wide funding for operational and investment costs.123
Why — This would reduce compliance costs and provide financial assistance to make carbon recycling technologies viable.45
Impact — Consumers could face higher prices from a proposed contribution based on the carbon impact of products.6
Belgian chemical industry demands technology-neutral electricity market reform
23 May 2023
Message — The federation recommends promoting voluntary long-term contracts while maintaining technology neutrality. They also oppose state aid measures that interfere with market price signals.12
Why — This approach would ensure competitive energy prices for energy-intensive chemical companies.3
Impact — Renewable energy operators lose guaranteed subsidies and protection from market price changes.4
Belgian chemical industry warns against burdensome new labeling rules
29 Mar 2023
Message — The federation requests more flexible labeling rules and a three-year transition period. They also urge aligning chemical definitions with REACH regulations to prevent data confusion.12
Why — Longer timelines and simplified labels would reduce compliance costs and administrative burdens for companies.3
Impact — Environmental goals are harmed as new requirements significantly increase the waste of packaging materials.4
Belgian Chemical Industry Urges Technology-Neutral Hydrogen Framework
17 Jun 2022
Topic — Methodology for assessing greenhouse gas savings from recycled and renewable transport fuels.
Message — Essenscia urges a technology-neutral approach including low-carbon hydrogen. They request limiting the Renewable Energy Directive to energy use. Additionally, accounting rules for avoided emissions should not include a 2036 time restriction.1234
Why — This ensures the chemical sector can access necessary hydrogen volumes at competitive prices.5
Impact — Renewable electricity producers lose market exclusivity if other low-carbon methods are recognized.6
Response to Revision of EU rules on Gas
12 Apr 2022
essenscia, the Belgian cross-sectoral federation of the chemical and life sciences industries, represents and promotes the interests of of more then 720 companies in the chemical and life sciences sector.
The chemical sector is a large producer and consumer of hydrogen and expects hydrogen to play an import role in a low carbon economy. Essenscia therefore welcomes the pro-active role the EC is taking in the development of hydrogen infrastructure. To stimulate a uptake of a hydrogen market following elements need to considered for the regulation:
1. Tariffs infrastructure should be non-discriminating, transparent and cost-efficient.
As article 15 of the regulation stipulates, it is important that the methodologies on tariffs for access to networks are transparent, reflect the actual costs incurred and are applied in non discriminatory manner. This should not be different for renewable and low carbon gases. The infrastructure is needed to transport molecules regardless their origin. Essenscia supports the uptake of renewable and low carbon gases. However the way to promote the uptake of those new carriers must be focused and temporary organised by transparent support schemes. Tariffs discounts on infrastructure are inappropriate as they are not in line with principles of non-discriminating, transparency and cost efficiency. This includes tariffs discounts for entry points, exit points, interconnections points including to third countries. A preferential approach would put in question the approaches for both electricity and gas and this within Europe as on the EU borders.
2. Careful assessment on blending needed, including additional cost to guarantee sufficient quality for all grid users and regulatory (e.g. ETS) and commercial impacts
The blending of H2 in the natural grid has in the short term a very limited potential to reduce the GHG impact of gas grid consumers. An advantage that cannot be underestimated, is that this would create an immediate offtake for decentralised H2 production, for which costs are often not competitive yet. This blending in small concentrations could help in the optimization and cost reduction of
decentralised climate-friendly H2production. Nevertheless, the blending of H2 in the gas grid leads to possible fluctuations in gas quality and present considerable technical, commercial and regulatory challenges :
-a) Technical challenges:
- Certain boilers, cogeneration equipment or gas turbines can be sensitive to hydrogen and will need to be adapted to changing burning
properties.
- It may render natural gas unusable as a feedstock, due to downstream processes not being able to process the hydrogen or causing
disruption, already from 1.5%
b) Commercial Issues: Blending may precipitate that the contracted composition of gases varies from the actual composition of delivered volumes. This creates commercial uncertainty for both end-users and suppliers.
c) Regulatory Compliance: Compliance with EU environmental regulation is linked to physical emission levels measured at the plant (EU Emissions Trading System, Industrial Emissions Directive). Variations in gas composition at the exit point from contracted volumes would undermine monitoring, verification and reporting measures.
Some of these problems can be addressed by using membrane technologies at those sites sensitive to higher concentrations of H2, but this will come at a high cost.
Hydrogen is a valuable molecule and optimal use must be considered. The increased level of hydrogen in the natural gas grid might increase the overall costs of the blend, without bringing tangible value added to consumers, who could have a higher return from other greenhouse gas
saving investments.
Therefore, before any obligations are made on blending hydrogen in the gas grid, an detailed assessment, including these additional cost and regulatory and commercial impacts need to be made.
Read full responseResponse to Revision of EU rules on Gas
12 Apr 2022
essenscia, the Belgian cross-sectoral federation of the chemical and life sciences industries, represents and promotes the interests of of more then 720 companies in the chemical and life sciences sector.
The chemical sector is a large producer and consumer of H2 and expects H2 to play an import role in the future. essenscia therefore welcomes the pro-active role the EC is taking in the development of H2 infrastructure and the opportunity to provide input on this important topic.
Please find the input of essenscia in the file attached.
Read full responseResponse to Review of Directive 2012/27/EU on energy efficiency
19 Nov 2021
The EC recently published its “fit for 55” package, including a review of the energy efficiency directive (EED). Essenscia supports the climate transition and considers the reduction of greenhouse gases, while remaining competitive in a global context, key. The sector finds energy efficiency crucial element in the transition and the revision of the EED could help industry in its efforts to reduce GHG emissions.
The chemical and life sciences sector has been working for decades on reducing its own energy consumption and associated greenhouse gas emissions. The sector in Belgium is among the world leaders when it comes to producing with efficient use of energy and raw materials. Since 1990, total production in the sector has tripled, while energy consumption has only increased by 37%. In other words, energy efficiency has increased considerably and production plants are getting close to their thermodynamic limits. Therefore implementing energy efficiency measures remain important to save energy and reduce GHG emissions, but will not be sufficient to reach climate neutrality by 2050. The production and import of abundant low carbon energy at competitive prices combined with the implementation of new low carbon technologies will be crucial for industry to make the transition.
The new low carbon technologies require more energy and could lead to less energy efficiency performance and other targets might interfere with the energy efficiency targets. For example an increase in the share of renewable energy might also lead to lower energy efficiencies due to the need for a more flexible energy demand, possibly leading to processes operating under non-ideal conditions, or energy losses due to energy storage and conversion. Essenscia therefore welcomes the recognition of the possible increase in industry’s energy demand that may result from its decarbonisation in recital 9 and article 4. However, therefore also the EED articles, requiring a linear reduction of the final energy use, cannot be maintained. Energy efficiency relates to the amount of energy per ton product made or degree heated, and is not related to the absolute final energy consumption. Instead of imposing an energy consumption reduction as such, the EED should therefore pursue a performance-related and cost-efficient approach. This means the target should not put a limit on absolute energy consumption. This will allow industry to grow and to implement the (energy intensive) technologies needed to reduce GHG emissions of their processes and of other sectors , i.e. the ultimate goal, without being hindered by limitations on the energy demand.
Other directives, such as the Energy Performance Directive of Buildings, the Clean Vehicles Directive, energy labelling are important for efficient energy use in the EU. Annex V however exclude all achieved energy efficiency by EU legislation like for example by energy labeling, or standards. In the review of EED annex V is further extended so MS cannot include reduced energy use in EU ETS sectors. This would pose an ever less achievable implementation challenge for Member States, obligated parties and, by extension, end-users and erodes the support to improve standards. Essenscia therefore recommends that all achieved energy efficiency, either as a result of EU regulations or within ETS sectors, is included in the accounting and not excluded like specified in annex V.
The revised EED contains a new definition of high-efficiency cogeneration. This new definition includes criteria on GHG emissions by setting limitations on CO2 emissions and on energy carrier use like for example waste and off-gases. As overlap between directives must be avoided and CO2 emissions are already regulated by other directives (e.g. ETS),essenscia recommends to remove the CO2 criteria from the definition of high-efficiency cogeneration as it deals with energy carrier use and it is not linked, but even hinders energy efficiency.
Read full responseResponse to Revision of the Renewable Energy Directive (EU) 2018/2001
18 Nov 2021
The EC recently published its “fit for 55” package, including a review of the renewable energy directive (RED). Essenscia supports the climate transition and considers the reduction of greenhouse gases while remaining competitive in a global context key. The revision of the RED II could help industry in its efforts to reduce GHG emissions if access to abundant, competitive and secure climate neutral energy including import and access to cost-competitive climate neutral produced hydrogen is assured.
1. Access to abundant, competitive and secure climate neutral energy are key
The RED focuses mainly on an increase of renewable energy (RE). essenscia fully supports an increasing share of RE in the energy system either in the form of electrons (e.g. electricity) or molecules (e.g. biogas, H2, or derivates, …). However, seeing the constant energy demand of industry is not expected to decrease, the potential RE production is limited in EU, and production of solar and wind energy is highly intermittent, RE alone will not be sufficient. Therefore essenscia welcomes that RFNBO’s are taken into account in the targets and recommends that also the recycled carbon fuels and other low carbon energy carriers are taken into account in the targets of the RED. Furthermore an adequate framework to allow import of low carbon energy carriers is needed.
In fact an holistic approach focussing on the reduction of the GHG intensity of the entire energy system based on the principles of technology neutrality and cost-efficient should be the basis of the RED. Essenscia welcomes the approach in the transport sector e.g. target based on GHG intensity and asks the EC to consider a similar approach for the overall target e.g. a target based on GHG intensity without subtargets on specific sectors or energy carriers.
2. Access to cost-competitive climate neutral produced hydrogen
For our sector, already a large consumer of H2, access to competitive H2 will be crucial to remain competitive in a global context and to allow our sector to implement low carbon processes requiring H2. essenscia welcomes all initiatives aiming to support further uptake of H2. However the proposed H2 target of 50% green H2 consumption endangers the competitiveness of the sector of chemical industry and life sciences in Belgium and would hampers future developments of H2:
- Principles of technology neutrality and cost efficiency need to be maintained e.g. no subtarget on a specific energy carrier to allow competition between renewables, and low carbon technologies. Seeing the limited and not equal potential of RE, other climate friendly H2 productions routs (MSR combined with CCS, pyrolysis of methane) should equally be stimulated. Several projects under development are at risk by this proposal. In addition this target is not in line with the main principle of ETS, GHG reductions were it is most cost-efficient.
- Production and consumption of renewable H2 do not necessarily happen in geographically correlated areas. As can be seen from the IA, especially north-western Europe with strong industrial clusters and a low RE potential will be at risk. This target will create unequally spread economic and technical disadvantages for industry across Europe and is not in line with a level playing field.
- Supporting framework to remain competitive in global context is missing. Renewable H2 is not expected to be cost-competitive in the short term. An early uptake of renewable H2 must be accompanied by supporting measures (e.g. contracts for difference) on EU level, especially in those regions with high risks.
- Realistic conditions for H2 produced by water electrolysis. Conditions like additionality, temporal and geographical correlation need revision as these hamper the development of renewable hydrogen.
- Chemical industry uses H2 mainly as a feedstock. This H2 consumption should be excluded from targets on energy consumption as this is out of scope of the directive.
Read full responseResponse to Revision of the Energy Tax Directive
18 Nov 2021
Essenscia, the federation representing the Belgian chemical and life sciences industry, welcomes the update of the scope of the Energy Taxation Directive (ETD) that recognizes new energy carriers, like hydrogen, and the alignment on energy content of carriers.
Both the EC and the Members States need to commit to a long-term policy framework without hampering competitiveness for business while supporting climate policy objectives. This should include a predictable taxation regime. As our industry needs large amounts of energy at competitive costs for its operations, increased tax rates should go together with carbon leakage protection measures in the ETD. Furthermore, we strongly object to the removal of the option to allow differentiated rates according to quantitative consumption levels. As businesses will start moving more and more towards new energy carriers in their daily industrial processes, EU rules should allow differentiated rates on quantitative consumptions levels to support industrial production in Europe. Moreover, existing flexibilities for Member States should be preserved, for instance in differentiating taxation rates between business & non-business users.
Inconsistencies or overlaps with other EU legislation should be avoided. The ETD revision should take into account all (energy) costs businesses are already facing as well as the overall EU competitiveness. Therefore, the focus of the ETD should be kept on energy consumption. As CO2 emissions are already regulated by other legislation, CO2 taxation on top of other carbon pricing, like EU ETS should be excluded. In that framework, we have questions on the basis for EC’s proposal to differentiate minimum rates for certain technologies through environmental performance ranking as this does not seem to be based on a common environmental parameter and as this will run counter the energy efficiency targets. Furthermore, the lack of separation between energy and environmental taxation in the proposal could lead to double taxation with other carbon pricing. We propose to respect technology neutrality as a principle in any environmental ranking that would be part of the decision, by topping up a base rate on energy content (€/GJ) with an environmental rate reflecting the emission intensity of the fuels used (converted into €/GJ) to be levied on those sectors that are not covered by EU carbon pricing instruments (EU ETS).
Furthermore, our industry is a frontrunner in the EU hydrogen economy, and low-carbon and renewable hydrogen production as well as a broad uptake of hydrogen as a new energy carrier represent a critical pathway to reducing greenhouse gas emissions in our sector. While ascribing the lowest taxation minima to both low-carbon and renewable hydrogen until 2033 is welcome to help scale-up production, we would caution against setting a differentiated rate for hydrogen based on production technologies. As there is no differentiation based on production technology in the minimum rates for taxation on electricity consumption as secondary energy carrier in order to promote electrification in energy use, no differentiation on production technology should be done for hydrogen as secondary energy carrier neither since this would lead to discrimination of energy carriers that support energy transition and climate action.
Lastly, we would like to point out to link the ETD to the definition of a CHP in the energy efficiency directive (“EED”) only in case that the CO2 restrictions in Article 2 (34) of the EED is removed since this interferes again with the ETS as steering instrument for CO2 reduction.
Read full responseResponse to Updating the EU Emissions Trading System
8 Nov 2021
essenscia welcomes the opportunity to participate in the consultation on the revision of the ETS and continues to support emissions trading as a policy tool to sustainably achieve agreed emission reductions at the lowest cost to society: Emission mitigation options and investment decisions of companies and sectors in the emissions trading scope will be triggered according to their economic, environmental and social feasibility. These decisions must prepare industry to reduce emissions in order to fulfill the ambition of ETS and prepare for a climate neutral, circular economy in Europe, while maintaining global competitiveness. Therefore, inclusion of waste incineration in the scope must give a coherent signal on circularity. Moreover, a solid and certain framework for carbon leakage protection for direct and indirect emissions is key to safeguard competitiveness and will help to incentivize investments in new technologies in Europe.
All sectors must be able to apply for carbon leakage protection during the entire trading period based on their sector specific parameters at disaggregated level taking important economic realities as value chain effects and the level of CO2 price into account. As the current list is not reflecting the tremendous price increases, this qualitative assessment is key to reflect the new economic reality.
For eligible sectors, free allocation must be firmly enshrined in legislation, comforting companies on their competitiveness. The budget for free allocation cannot be limited by correction factors that induce legal uncertainty on EU’s ambition for a genuine industrial policy. Benchmarks should be based on a representative part of the production activity and reflect the economic and technical reality. The current measure to incentivize new technologies by limiting the decrease of benchmark values to 1.6% per year must therefore be maintained for fallback benchmarks, while resources, infrastructure or technologies that cannot be broadly applied in Europe should not determine the benchmark.
Industry is innovating and investigating climate solutions for its energy intensive activities. essenscia welcomes therefore the increased innovation fund and emphasizes that funds that originate from industries’ free allocation budget should in turn be available to the entire ETS industry, regardless their coverage by a CBAM.
While electrification is an important and innovative climate solution for the chemical and life sciences industry as well as for other sectors, electricity prices are skyrocketing. Moreover, the carbon leakage protection on electricity consumption is insufficient and limited to a patchwork of national choices. If Europe wants to boost electrification, a more effective and legally certain carbon leakage protection at EU level to compensate electricity costs must be made at the moment own resources become available for climate action.
essenscia regrets that a linear reduction factor would still apply to new investments in the EU, creating a distortion with existing installations. Furthermore, essenscia opposes (i) the impact of rebasing of the cap on free allocation and (ii) the strengthening of the MSR, as they artificially decrease the ETS sectors’ capacity and competitive resilience.
Important aspects such as the need to align carbon leakage provisions between the ETS Directive and the CBAM regulation should not be left to EC procedures but be set out in the legislative texts. In this framework, essenscia supports a transition period for the phasing out of free allocation for CBAM sectors. However, this phasing out should not apply to the production of products of sectors covered by CBAM that are not produced for the EU market or delivered further down the value chain to activities not covered by the CBAM as both export and downstream activities would otherwise be exposed to a high risk of carbon leakage.
Read full responseResponse to Revision of EU legislation on registration, evaluation, authorisation and restriction of chemicals
31 May 2021
essenscia welcomes the opportunity to participate in the public consultation on the inception assessment on REACH. essenscia and its members support the comments submitted by Cefic in this consultation. Additionally, we want to highlight some points.
(1) REACH is a cornerstone for a European Circular Economy
REACH is the most comprehensive legal regulatory framework securing safe use of chemicals, including when incorporated in articles. The 2022 REACH revision is an opportunity to further improve the current framework by making it more efficient, consistent and coherent with other pieces of EU product safety and environmental law to achieve a circular economy. It should be avoided that requirements and assessment processes are duplicated in other legislative frameworks (eg like ecodesign). Upfront coordination and alignment between authorities is needed to come to a one substance, one assessment approach. EUCLEF clearly demonstrates the existing complexity of having a multitude of legislations addressing chemical safety in products and during use. Adding additional complexity through waste based legislations (often with national and regional differences) does not help creating an efficient single material and products market. Neither would introducing national authorisations help as it might lead to different approaches within the EU and put the level playing field at risk. We believe REACH and other product legislation at EU level are key to achieve a successful circular economy.
However, careful consideration should be given to add additional data requirements in registration dossiers, especially if not relating to intrinsic substance properties like environmental footprints of chemicals. Information and data requirements should be incorporated in the legal framework where the use of the data makes sense (eg. if on ‘consumer good level’ it should be incorporated in product specific regulations), and the data generation burden and transmission should be efficiently shared within value chains.
(2) Do not leave SMEs behind
We see especially our smaller members struggle with the implementation of this complex regulation. When introducing changes, the Commission must make sure they are feasible and can be implemented across the value chain and especially by SME companies. Legislation must be made simpler and more efficient, not more complex.
When a growing company loses its S, M or E status, a lot of advantages are lost, not the least the reduced registration fee. The possibility should be given to those companies when changing the status to agree on a time path with ECHA to pay the additional fees related to the new company size.
(3) More enforcement needed on on-line sales and imports from outside the EU
The REACH Regulation aims at ensuring both a well-functioning single market for chemicals and a high level of protection of human health and of the environment. However lack of enforcement downgrades the level playing field between non-EU and EU companies and jeopardise consumers health or the environment due to the use of incompliant products. More attention should be given to online platforms, making sure they only offer EU compliant products for EU sales.
essenscia is the Belgian federation of the chemical, plastics and life science industry, representing 720 companies. mission statement: The world is facing important challenges in the use of energy, natural resources, and the provision of food, water and health for its growing population. Chemistry, plastics and life sciences are essential to making the world’s development sustainable. Our innovative research is crucial to the development of new products, applications and services. Our industry is central to a successful future and to improving everyone’s quality of life.
Read full responseResponse to Revision of EU legislation on hazard classification, labelling and packaging of chemicals
31 May 2021
essenscia welcomes the opportunity to comment on European commission inception assessment on CLP. Safe use of chemicals both for human health and the environment requires the identification and communication of hazards at national, regional and global level in a clear and consistent way, without duplication or contradictions.
essenscia and its members support the comments submitted by Cefic. Additionally, we want to highlight some points based on the experience of ao SME members.
(1)Introduce the conclusion of “no classification” in annex VI based on the conclusion of RAC during a Classification and Labelling Harmonisation process
RAC discusses several endpoints during the CLH process. Sometimes, for some endpoints discussed, the conclusion is taken that the substance data is conclusive, but not meeting criteria to classify the substance. In order to avoid confusion with endpoints that are non-conclusive due to lack of data and in order to avoid self-classification for the endpoints not listed in Annex VI, an ‘assessed, but non-classified’ indication should be introduced for that endpoint in Annex VI. The information that RAC concluded not to classify a substance for a certain endpoint is currently not transparently visible.
(2)expand the use of multilingual fold-out labels
Criteria to use multilingual fold-out labels are too stringent, especially for a country requiring at least 3 national languages on the label with a small share in the EU single market. Seen the free movement of citizens in Europe, it is seen as an advantage to have multiple languages on a label, especially in an international city as Brussels. Currently, it is unclear companies may use multilingual fold-out labels for normally sized packaging.
Therefore incorporating the proposal on multilingual fold-out labels developed by the UN GHS (8th revision) would be appropriate.
(3)More enforcement needed on on-line sales and imports from outside the EU
The CLP Regulation aims at ensuring both a well-functioning single market for chemicals and a high level of protection of human health and of the environment. However lack of enforcement downgrades the level playing field between non-EU and EU companies and jeopardise consumers health or the environment due to lack of the appropriate hazard communication. More attention should be given that online platforms offer EU compliant products. A lot of CLP non-compliant products via on-line sales are coming into the EU (for which only a part is highlighted by the Safety Gate).
essenscia is the Belgian federation of the chemical, plastics and life science industry, representing 720 companies. mission statement: The world is facing important challenges in the use of energy, natural resources, and the provision of food, water and health for its growing population. Chemistry, plastics and life sciences are essential to making the world’s development sustainable. Our innovative research is crucial to the development of new products, applications and services. Our industry is central to a successful future and to improving everyone’s quality of life.
Read full responseResponse to Revision of the Energy and Environmental Aid Guidelines (EEAG)
10 Dec 2020
essenscia appreciates the action of the Commission in reviewing and adapting, where necessary, the EEAG to help the unprecedent shift deriving from the Green Deal. A clear and predictable strategy to safeguard industries competitiveness, especially given that global action on climate change remains fragmented, is a must to allow companies to make the necessary industrial transformation.
State aid is restricted to Member States resources, which makes it unfit to provide (i) for the necessary financial means for the ambition at EU level and (ii) for equal access to all companies, both necessary to finance the transition. Therefore, fair competition for all comparable activities in the EU internal market should be safeguarded by ensuring that companies across the EU are enabled to transform in a competitive manner, regardless of the budget flexibility of the Member State concerned.
EEAG will have an important role to play by developing and further deploying climate neutral energy sources while ensuring that energy costs remain globally competitive for industry. EEAG should provide long-term certainty on exemptions to climate costs in order to make investments and operations in Europe more attractive. Hence, approval of state aid should not be made subject to future policy changes.
EEAG should allow support for the development and uptake of both existing as well as breakthrough decarbonization technologies and energy carriers, such as CO2 recycling (CCU), hydrogen, CCS, electrification of processes etc. which contribute to the realization the Green deal ambition, whilst still critically assessing the level of state aid in order to avoid overcompensation and safeguard fair competition in the EU internal market. However, the reference to the EU taxonomy in its current stage of implementation would result in a continuous restricted categorization of activities/ companies which may be eligible for state aid. This will not help the profound industrial transformation needed to make the Green Deal a reality.
EEAG should look into what is needed for an appropriate market design that enables cost-efficient use of resources in generation, demand and infrastructure and sufficient investment signals at acceptable risk level. The aid should be based on an EU and international comparison of the energy costs for the industry as these energy costs differ due to less or different taxes and surcharges. Therefore, the current reductions/ exemptions for renewables support should be strengthened and should be extended to shield the industry from the extra costs resulting from energy transition support, higher climate ambition and the EU green deal in order to avoid carbon leakage.
The EC needs to assess all sectors (not only the ones already mentioned in current list) to determine their exposure. Hereby the EC should take into account competitiveness vis-à-vis regions where competitors do not face an equivalent burden (reflected in trade intensity which should take into account future evolutions) looking forward towards new energy carriers like electricity, synthetic fuels and hydrogen.
Taking the above into account, we strongly oppose the idea of the EC to increase consistency with the new state aid rules for indirect costs compensation of the ETS. The number of proven carbon leakage sectors that are eligible for compensation was recently reduced without any prove of comparable burden in other regions reducing the carbon leakage risk and led to a (maintained) exclusion of parts of the chemicals and life sciences sector from the list, despite the increasing indirect costs of the EU ETS. This makes the methodology unfit to align the state aid rule with the ambition of the green transition without hampering industries’ competitiveness.
Read full responseResponse to Land use, land use change and forestry – review of EU rules
26 Nov 2020
Essenscia supports the European ambition to reach climate neutrality and considers that any increase in the 2030 targets should be in line with this ambition and in line with realistic innovation evolutions.
The introduction of sinks as means to balance emissions is a valid, long-term perspective and will require the establishment of a solid accounting system, including in the LULUCF sector. We therefore welcome the Commission’s intention to strengthen the monitoring, reporting and verification requirements for the LULUCF sector.
As mentioned in the 2030 impact assessment, the flexibility should not only be reserved to Effort-sharing sectors (Option 2). Industry (i.e. ETS sectors) should also have access to natural sinks as a way to mitigate their emissions, especially in the longer-term, when emissions will become increasingly harder to abate.
Read full responseResponse to Review of Directive 2012/27/EU on energy efficiency
21 Sept 2020
Essenscia supports the climate ambition and considers the reduction of greenhouse gases the main objective. Therefore it is important other targets, like the EED target, are supportive of this objective and should be made indicative.
The chemical and life sciences sector has been working for decades on reducing its own energy consumption and associated greenhouse gas emissions. The sector in Belgium is among the world leaders when it comes to producing with efficient use of energy and raw materials. Since 1990, total production in the sector has tripled, while energy consumption has only increased by 37%. In other words, energy efficiency has increased considerably and production plants are getting close to their thermodynamic limits. Therefore implementing energy efficiency measures remain important to save energy and reduce GHG emissions, but will not be sufficient to reach climate neutrality by 2050. The production and import of abundant low carbon energy at competitive prices combined with the implementation of new low carbon technologies will be crucial for industry to make the transition.
The new low carbon technologies require more energy and could lead to less energy efficiency performance and other targets might interfere with the energy efficiency targets. For example an increase in the share of renewable energy might also lead to lower energy efficiencies due to the need for a more flexible energy demand, possibly leading to processes operating under non-ideal conditions, or energy losses due to energy storage and conversion. The impact assessment should assess the impact of such increases of energy and reduction of energy efficiency on the feasibility of energy efficiency target.
As implementation of new carbon technologies will require more energy, the EED articles, requiring a linear reduction of the final energy use, cannot be maintained. Energy efficiency relates to the amount of energy per ton product made or degree heated, and is not related to the absolute final energy consumption. instead of imposing an energy consumption reduction as such, the EED should therefore pursue a performance-related and cost-efficient approach. This means the target should be made indicative and should not put a limit on absolute energy consumption. This will allow industry to grow and to implement the (energy intensive) technologies needed to reduce GHG emissions of their processes and of other sectors , i.e. the ultimate goal, without being hindered by limitations on the energy demand.
Each sector (buildings, transport, industry) has its own potential to increase energy efficiency, and will require sector specific measures to increase effectiveness and cost-efficiency. Therefore, a bottom up approach extending the use of energy efficiency standards is to be considered in the revision.
Finally, in case the EED targets would still be distributed across MS, cost efficiency should be the basis of the effort sharing.
Read full responseResponse to Revision of the Renewable Energy Directive (EU) 2018/2001
21 Sept 2020
Essenscia supports the climate ambition and considers the reduction of greenhouse gases the main objective. Therefore it is important other targets, like the RED target, are supportive of this objective and should be made indicative.
To reach climate neutrality over time, industry will require access to large amounts of low carbon energy at competitive prices. The challenge of the decarbonisation of energy demand remains however huge. In 2017 only 26,5% of total energy consumption is renewable or low carbon (13,9% renewable and 12,6% nuclear). Given the enormous challenge Europe faces not only the share of renewable energy needs to increase but all forms of climate neutral energy sources (e.g. synthetic fuels and nuclear energy) should be stimulated and included in the targets of the RED.
An increase in the share of low carbon energy is needed, nevertheless it is important this follows a market driven and cost-effective approach and does not result in non-competitive energy cost for industry, who needs to remain competitive in a global context .
Innovation will play a crucial role in the increase of the share of competitive climate neutral energy and should be financially stimulated and supported. This financial support should be cost-efficient, should focus on CAPEX costs, should be temporary and benefit innovative technologies that are – for the time being- viable without support.
The RED sets sustainability and greenhouse gas emissions saving criteria for members states when implementing financial support schemes to stimulate biofuels, bioliquids and biomass. In this context it should be stipulated in the RED that these criteria can not apply in accounting systems that are not financed by the member states (Crediting systems) like the Monitoring and Reporting regulation of the ETS which follow international IPCC guidelines. Applying these criteria only in ETS (and not in non-ETS) undermines the integrity of the accounting systems combined.
To reduce GHG emissions, the industry will have to implement new low carbon technologies that will require more energy. Furthermore, an increase in the share of renewable energy might also lead to lower energy efficiencies due to the need for a more flexible energy demand, possibly leading to processes operating under non-ideal conditions, or energy losses due to energy storage and conversion. The impact assessment should assess the impact of such increases of energy and electricity demand on the feasibility of the renewable energy target as well as possible implications with regards to energy efficiency and the target of the energy efficiency directive.
Hydrogen, as energy carrier and feedstock, is recognised by the Commission to play an import role in the transition to climate neutrality. To stimulate the hydrogen market the RED should focus on two aspects: the supply and the demand side. To stimulate the supply of climate neutral hydrogen the RED target should include all forms of climate neutral hydrogen (e.g. fossil based combined with carbon capture, methane pyrolysis, electrolysis...). While on the demand side, to accelerate the uptake of hydrogen (or energy carriers based on H2), it is important that no extra restrictions for users are imposed on the origin of hydrogen (similar to electrification). This would lead to even more expensive hydrogen prices and would hamper further developments of hydrogen use.
Finally, in case the RED targets would still be distributed across MS, cost efficiency should be the sole basis of the effort sharing.
Read full responseResponse to Revision of the EU Emission Trading System Monitoring and Reporting Regulation (MRR)
24 Jul 2020
The MRR offers an framework to allow consistent accounting in ETS. Essenscia welcomes improvements on the MRR provided they are based on following main principles:
- Every emitted CO2 is accounted for and only once; IPCC guidelines are respected
- Accounting rules in ETS and non-ETS accounting are compatible and the same requirements for zero rating are applied
- Emission Factors depend on the source stream used and not on the ETS installation (cfr. based on efficiency, or starting date installation)
Essenscia has several concerns with the proposed revision of the MRR regarding these main principles, specific amendments can be found in Annex I:
- Carbon Capture and Usage (CCU) is recognised as a new low carbon technology, that will contribute to climate neutrality. The MRR rules do not contain consistent accounting rules yet as avoided CO2 emissions are reported as if they were emitted (double counting). The update of the MRR provides a perfect opportunity to recognise avoided CO2 emissions by making CO2 circular by providing a consistent accounting framework. In order to integrate CCU properly into the MRR we propose 3 adaptations (see Annex I and II for more details on proposal):
o CCU materials: recognise avoided CO2 used to produce chemical stable materials in which the CO2 remains bound in the use phase.
o Climate neutral fuels: when the captured CO2 is used to make a product which releases the CO2 during the use phase, the captured CO2 needs to be reported, creating thereby carbon neutral fuels. To avoid double counting the CO2 released during use phase must be zero rated (in ETS or non-ETS).
o CCS for biogenic CO2: the emission factor of biomass is zero, when biogenic CO2 is captured and stored, it should be recognised as a sink.
- Sustainability and GHG saving RED II in MRR (see Annex III for more details)
o The zero rating of biomass originates form IPCC guidelines to guarantee consistent international reporting and tracking of fossil emissions. Therefore, the zero rating of biomass can’t be considered as a “financial support scheme”. An adaptation of recital 4 of the MRR is needed.
o “Non-sustainable” biomass cannot be classified as fossil as this is against IPCC rules. We do agree that sustainability criteria need to be fulfilled however these should be incorporated in standards for sustainability for EU ETS and non-EU ETS and not in the MRR. It should be avoided that the “zero rating” of the same biomass product becomes depended of the installation (efficiency and replaced fuel) or “starting date” of the installation:
o Not in line with benchmarking methodology: It is important to note that during the BM update this criterion was not taken into account during the data collection, which will result in unrepresentative BM updates (especially heat BM).
- MRR and biogas
o To guarantee a level playing field, the same approach is needed in all MS.
o We do not see a valid reason why operator and the producer of the biogas have to be connected to the same grid. On the contrary as some MS have more potential to produce biogas, it should be possible for EU ETS installations to buy biogas without physically being connected to the same grid. A framework needs to be developed or appointed (e.g. Guarantees of origin) to avoid double counting. the current wording is an obstacle limiting the expansion of biomass usage in the industry
o It should be noted that GHG saving and energy efficiency criteria cannot be part of GO (in this context “purchase records”)
o We propose to delete article 39.5 as this is MS specific, and this does not give an opportunity to an EU ETS installation to buy and use biogas.
Attached pdf:
Annex I (as from p. 1 pdf attached): Proposed amendments
Annex II (as from p.3 pdf attached): CEFIC position on CCU
Annex III (as from p. 11 pdf attached): Position paper link EU -ETS and RED
Read full responseResponse to A EU hydrogen strategy
8 Jun 2020
Essenscia welcomes the initiative of the European Commission to adopt a strategy on hydrogen in Europe. Essenscia expects hydrogen to play an important role in in the transition towards climate neutrality. The future of the European chemical industry – especially in the transition towards climate neutrality – will be closely linked to the development of a hydrogen economy, as it is both a major producer and consumer of hydrogen. In the future, hydrogen could become a major building block of chemical products and could help to decarbonise the chemical industry’s energy consumption.
Following elements need to be considered when developing a European hydrogen strategy:
• Further assessment needed on role of hydrogen in the energy supply system. An assessment of the amounts and the cost of energy needed for Europe (for all sectors combined) to reach a climate neutral and more circular economy without losing economic welfare is needed and should include how these amounts can be made available by production or import at an affordable and adequate level in a global context, including storage and flexibility options, and with the use of the most cost efficient energy carriers. The ‘new’ role hydrogen (or derived products) can play in the energy system, should be part of this (economic) assessment.
• Reduce the cost of climate-friendly hydrogen production. A large scale uptake of climate-friendly hydrogen will depend on its’s production cost compared to conventional production methods and on its’s competitiveness compared to other energy products. Currently in neither cases climate friendly hydrogen is competitive. Strong research and innovation support is needed to encourage progress on climate friendly hydrogen production technologies. This should include technologies which are still at low Technology Readiness Levels (TRLs) (like methane pyrolysis) or improvement/upscaling of existing technologies by increasing their performance and lowering their costs. To overcome the barrier between demonstration projects and large scale production, new types of instruments (like Contracts of Difference) need to be assessed. It is important to note such instruments are restricted in time and can only play a role in a final step of the innovation cycle to stimulate large scale uptake. To provide further incentive for deployment of low carbon production technologies more robust instruments like ETS-EU (including carbon leakage measures) are needed.
• No extra restrictions on hydrogen consumption to increase hydrogen demand. The use of hydrogen as energy carrier or feedstock has to compete with existing, less expensive fuels/feedstock. To accelerate uptake of hydrogen (or energy carriers based on H2) as energy carrier or feedstock no extra restrictions for users should be imposed on origin of hydrogen (similar to electrification). This would lead to even more expensive hydrogen prices and would hamper further developments of hydrogen appliances.
• A competitive market: once the growth of climate-friendly hydrogen starts to accelerate, regulators and competition authorities will have to ensure that the hydrogen market is subject to a sufficient degree of competition.
• A proper European hydrogen transport infrastructure is needed to ensure security of hydrogen supply. This should include interconnection with third-party countries, cost-efficient infrastructure adaption and a rational allocation of costs. Infrastructure should be carefully planned to safeguard gas quality requirements, to allow safe and efficient transport and build on the potential of hydrogen as a storage solution. When the quantity of producers and consumers connected to the grid reach a level of competitive relevance, grid operators should in principle be regulated in the same way as gas or electricity grid operators. It should be recognised that part of the existing infrastructure has been financed and build by private parties as part of their operations.
Read full responseResponse to Climate Law
30 Apr 2020
The aim of the Green deal is ambitious and requires a robust EU strategy to adapt instruments to the globalized economy while protecting industrial competitiveness in order to attract the investments spurring innovation for the transition. The chemical and life sciences industry wants to play an active and solution-oriented role in the transition.
essenscia read carefully the European Commission proposal for a European Climate Law (“draft climate law”) enshrining the climate neutrality objective into legislation. We think the use of a regulation can avoid ‘goldplating’ between the different member states. The 2030 targets are fixed in the governance regulation. In the framework of a coherent legislation without overlaps or double burden, the climate law should focus on 2050.
Need for a coherent approach for industry on EU level
The non-ETS emissions are treated at Member State level, while the greenhouse gas emissions from EU ETS installations are treated at EU level. The current EU ETS ensures an equal treatment of installations in Europe by focussing on a reduction of emissions at the least efficient installations while attempting to protect the competitiveness of the most efficient installations. This level playing field should be maintained and not be jeopardized by the climate law. In addition, a coherent treatment of the manufacturing industry at EU level is also after 2030 essential to avoid market distortions in Europe. It is therefore important that the future framework, while taking into account national specificities, does not lead to a nationalization of climate policy and fragmented action inside the EU. Therefore, manufacturing industrial activities currently falling under EU ETS cannot be considered in the member states obligations since this would distort the level playing field.
Post-2030 trajectory should be adopted by democratic procedure and regularly assessed
The draft climate law delegates the power to the EC to set out the trajectory for achieving the objective of climate-neutrality by 2050. As this trajectory aims at setting emission reduction targets, which are indisputably “essential” elements, this delegation is not in line with Article 290 TFEU. Therefore, such trajectory should be adopted in accordance with the ordinary legislative procedure.
The intention of the draft climate law is clear, but simply writing targets in the law will not make the transition happen. An intelligent framework with an open view on global climate action is needed. The techno-economic emission reduction potential of industry will depend on global take up of the climate challenge and the technological innovations. Due to the lagging time of converting innovations into commercial scale economical uptake, the most cost-efficient pathway to reduction via low-carbon innovation is not a gradual/linear path. In the short-term, we do not have all the necessary technologies, resources and infrastructure that will allow us to achieve drastic emission reductions. Different investment steps from innovation to implementation urge for a non-linear impact on EU emissions. Balancing the pace and scale of development and implementation of low carbon-innovations with the costs will be crucial to manage budgets.
Therefore, when the EC proposes a trajectory, it should conduct a detailed impact and feasibility assessment. This assessment should include check points regarding progress on the enabling conditions for the transition of the economy, availability of resources, global level of ambition and the pace and expected rate of deployment of breakthrough technologies.
International flexibility should be allowed
The draft climate law stipulates that the 2050 climate neutrality on EU emissions should be achieved domestically. The climate problem as well as the energy provision and resources are nevertheless global. Therefore, the use of international credits should be allowed to build in the global character and common action.
Read full responseResponse to 2030 Climate Target Plan
14 Apr 2020
Before increasing the 2030 target, a detailed assessment is needed. This assessment should include following elements:
•Innovation is not linear: Innovation for climate investments will result in new technologies, helping society to reach carbon neutrality. Essenscia welcomes the plan to increase budgets for innovation and make it part of the industrial policy. Nevertheless, results from innovation will only gradually be achieved and more cost efficient emission reductions are therefore only occurring after innovation has resulted in commercial deployment. This ‘lagging time for innovation’ should therefore be built into the most cost efficient pathway to climate neutrality, being a non linear growth path of emission reduction towards 2050.
•The most cost-efficient and internationally sound burden sharing between ETS and non-ETS should be applied when the target is increased: The effort to reach the -40% goal by 2030 is currently divided between ETS and non-ETS and clearly puts a higher ambition level to the ETS sector (-43%, while -30% for non-ETS). If the 2030 ambition is raised, the most cost-efficient and internationally sound burden sharing between ETS and non-ETS should be applied, knowing that untapped cost efficient potential e.g. in the buildings and transport sector remains and that other regions do not mirror the level of EU industrial emission reduction ambition, resulting in an persisting risk on carbon leakage.
•Adequate carbon leakage protection in ETS needed: Due to the persisting risk of carbon leakage, induced by differing climate policies outside of EU, an adequate share allowances available for free allocation is needed, fit for exposure risk and dynamic on production levels in order to avoid any downward correction factor not based on reduction of exposure risk.
•More new energy: indicative EED and RED targets to support GHG target. Implementing energy efficiency measures remains important to save energy and reduce GHG emissions, however this will not be sufficient to reach climate neutrality by 2050 since energy will always be needed for production, transport and heating purposes. On top of this new disruptive and innovative technologies providing for climate neutral energy carriers, are energy intensive and will influence energy demand. The EED articles, requiring a linear reduction of the final energy use, cannot be maintained in the current format. Energy efficiency and not energy reduction an sich should be pursued. Therefore the target should be indicative, allowing industry to implement the (energy intensive) technologies needed to reduce their GHG emissions, i.e. the ultimate goal, without being hindered by limitations on the energy demand. Similarly important is an increased share of renewable energy to reduces GHG emissions. Nevertheless all climate neutral energy, also synthetic fuels and nuclear energy, will help to achieve the EU ambition of climate neutrality. Therefore also the RED target must be indicative. Finally, in case the EED and RED targets would still be distributed across MS, cost efficiency should be the basis of the effort sharing.
•Further assessment needed on energy demand and energy supply options to assure abundant and competitive energy supply across Europe: An assessment of the amounts and the cost of energy needed for Europe (for all sectors combined) to reach a climate neutral and more circular economy without losing economic welfare is needed and should include how these amounts can be made available at an affordable and adequate level in a global context, including storage and flexibility options, and import of new energy carriers.
•Coherent legislation: The 2030 targets are currently fixed in the governance regulation, however we understand that the EC aims at eventually include the new 2030 target in the climate law. We emphasize the need for coherent legislation without overlaps or double burden. Therefore,the climate law should only focus on 2050.
Read full response1 Apr 2020
The draft regulation specifies that Member States and the Commission must follow the 2006 IPCC guidelines for inventories and the modalities, procedures and guidelines for the transparency framework referred to in the Paris Agreement ( Decision 18/CMA.1) when drafting their greenhouse gas inventories.
essenscia supports the use of the international IPCC guidelines as is it is important that consistent accounting rules are applied across the world. The transition to a circular, low-carbon economy is a key priority on the EU policy agenda. Carbon Capture and Utilisation (CCU) will be key to enable carbon neutrality. CCU products can particularly offer solutions to sectors that otherwise would be difficult to decarbonise.
At the moment however, avoiding CO2 emissions through CCU has no clear accounting framework. In order to promote innovation towards avoiding emissions and even removing CO2 from the atmosphere, there should be clear rules on monitoring and accounting in ETS and non-ETS sectors. The objectives should be that all CO2 is accounted for, including transfers, and that double counting and/or double crediting is avoided.
The IPCC guidelines currently cover specific and detailed guidelines for carbon capture and storage (CCS). However such specific guidelines do not exist for accounting in case of CCU. The guidelines include a general suggestion: “Quantities of CO2 for later use and short-term storage should not be deducted from CO2 emissions except when the CO2 emissions are accounted for elsewhere in the inventory” and in case of urea production where CCU already is applied the following is mentioned: “the quantity of CO2 recovered for downstream use in urea production must be subtracted from the total quantity of CO2 generated to derive CO2 emitted. Emissions of CO2 from urea use should be accounted for in the corresponding sectors”.
As a result, CO2 emissions in case of CCU most likely will be counted double – once in the ETS installations capturing the CO2 and transforming it into CCU-materials or CCU-fuels, and once in ETS or non-ETS sector at end-of-life (e.g. waste incineration of CCU-materials), or in the user phase (e.g. CCU-fuels).
Therefore, the IPCC guidelines should include specific accounting guidelines in case of CCU to avoid double counting of the CO2 emissions
As long as no specific accounting guidelines exist for CCU in the IPCC guidelines, the EU regulation should provide consistent accounting rules for CCU, that adequately support CCU and avoid double accounting by following the principles described above.
Read full responseResponse to Carbon Border Adjustment Mechanism
1 Apr 2020
essenscia agrees that an effective carbon leakage protection tailored to the effective carbon cost burden on competing industries in the rest of the world is crucial in the fight against climate change. The chosen carbon leakage measures need to provide carbon leakage protection for products on the EU market as well as for products intended to export. The EU ETS, with its free allocation principle and indirect cost compensation framework until 2030, is an appropriate tool for mitigating domestic GHG emissions of the EU industry and providing carbon leakage protection. Any future measures would therefore need to be as effective as the EU ETS free allocation and indirect compensation system both for importing and exporting sectors, while avoiding any retaliation risks on industry.
A carbon border adjustment mechanism (CBAM) is a trade-restrictive instrument which entails risks of possible unintended and far-reaching consequences especially for exporting sectors. Unless complemented by offsets of carbon cost for exporting sectors, such mechanism does not provide carbon leakage protection for export: as non-EU companies do not have to pay for their CO2 emission for products sold in their home market, the EU-company cannot pass on its EU-ETS CO2 costs to exported products delivered to non-EU consumers. Without carbon leakage protection by free allocation and indirect compensation, EU producers will lose market share outside the EU. Moreover, there is a risk of retaliation action by non-EU countries, again affecting the exporting sectors. Therefore, it is of utmost importance to assess whether a CBAM is needed, desirable and feasible over the longer term and which instrument at the border or at end consumer level could address unequal climate cost burden the best for the EU as net exporting continent. In this framework, essenscia requests an in-depth reflection on carbon pricing policies in general and on all possible policy options that would help mitigate carbon and investment leakage for exposed industries. Such system should focus on a carbon signal in production and consumption.
We do agree that the CBAM should align with the EU’s trade acquis, and should be WTO compatible. The EU will remain open to and depend upon international free and fair trade and will have to engage in dialogue with its trading partners in order to avoid trade conflicts. In case the CBAM is not applied to finished goods due to the complexity of the model but more to upstream goods of activities, it will be important for the impact assessment to calculate the estimated increased costs of the CBAM throughout the value chain, and whether this in turn would result in an increased import of finished goods in Europe. Moreover, our industry is a net exporter and therefore any new system should reinforce EU’s strengths in the global chemical industry as well as downstream value chains. The system should be balanced for import and export and should therefore foresee a rebate for exported goods. Limiting the CBAM to a selection of sectors will distort the level the playing field within EU-ETS (when applying a CSCF) and could on top lead to possible retaliation measures that will affect non-concerned sectors.
Any chosen option should not unnecessarily increase compliance costs or add administrative burden for the chemical and life sciences industry as well as competent authorities. There is currently no system in place neither in the EU nor at global level to determine and compare the carbon footprint of domestic and foreign products and/or producers. A robust monitoring, reporting and verification will need to be established ensuring legal certainty and equal treatment of international competitors.
Read full responseResponse to Revision of the Energy Tax Directive
1 Apr 2020
Essenscia understands the aim of updating the Energy Taxation Directive (ETD) and emphasizes the importance to avoid double taxation, to prevent competition distortion amongst EU energy consumers as well as to guarantee an international level playing field.
In this sense, essenscia welcomes the EC’s intention to avoid inconsistencies with other European legislation. Therefore, if a CO2 tax would be introduced, it should target non-ETS sectors. As CO2 emissions are already taxed in the ETS sector, CO2 taxation on top of the EU ETS should be excluded.
Both the EC and the Members States need to commit to a long-term policy framework without hampering competitiveness for business while supporting climate policy objectives. Therefore, in case taxation aims to steer energy use or emissions, it should be focusing on avoidable energy use or emissions (possibly in a harmonised fashion), while non-avoidable energy use or emissions should be exempted.
Further, essenscia supports the view of the EC that the revision of the ETD should not create additional tax burden for economic operators like energy intensive industry since this would risk hindering the development and operation in the EU. EU industries face growing energy cost due to the increase of policy-related taxation, surcharges not reported as taxes and network costs. Hence, tax exemptions remain important. essenscia opposes cataloging exemptions as subsidies.
essenscia agrees that the minimum levels of taxation are not the optimal instrument to avoid distorting of competition because member states have always the possibility to fix higher tax rates and extra surcharges than the others creating a distorted scheme. However, it should be clear that an indexation mechanism will not solve the problem, since this is in no way linked with competitiveness. In order to level the EU boundary energy cost conditions for industry, a fundamental shift in the European tax systems would be necessary, for example turn minimum into mandatory maximum levels of taxation that take in to account international competitiveness conditions.
Taxation is an instrument that can induce a behavioral change provided worthy alternatives are available. To avoid double taxation, energy products to produce electricity are currently exempted from the ETD. However, electricity as secondary energy carrier is taxed while electrification is one way for industry to reduce emissions. Therefore, manufacturing sectors should be allowed to electrify under the reviewed ETD. In this way the directive could more adequately promote electrification or the use of alternative fuels.
Read full responseResponse to Climate Law
5 Feb 2020
The chemical and life sciences industry wants to play an active and solution-oriented role in the transition and asks in return recognition of the size of the transformation challenge as well as coverage of the risks it entails. A proper impact assessment of the Green deal ambitions is required as well as a monitoring and adaptation mechanism in function of the evolution within the global framework. Transparency on the cost of the transition and a robust ‘green financing deal’ upfront of the investments is needed to turn the strategy into actions that are sustainably supported by the population.
Industry is an essential player to develop innovative technological solutions. Not the voting of targets will lead to necessary innovation but support by policies that ensure a long term stable, predictable, attractive regulatory framework that allows manufacturing industry to innovate. This implies legal certainty and predictability and a certain dynamism in case of changes/ actions on global level.
The irreversibility of the climate law coupled with a fixed timeline might not be adapted to the dynamics of a global economy and the need for global action to effectively tackle climate change. EC should perform regular impact assessments on 2050 targets that take into account global actions over time and that feed EU strategy. Such impact assessments include pace, cost of development and implementation of innovations, availability of affordable and sustainable energy, global context of competitiveness and investments.
EU’s current rules on climate action are already comprehensive, detailed and effective for sectors like industry and it is not clear which additional value to existing legislation will be created. It is questionable how coherence with existing legislation will be guaranteed and how the climate law relates to the clean energy package (governance regulation)? A successful industrial policy should be coherent and give the necessary stability for industry to transform. Eg. although the revised ETS directive will only apply as from Jan 2021, EC announced a review by June 2021. Moreover, EC recently indicated to limit the eligibility for indirect carbon leakage compensation while the carbon leakage risk did not substantially reduce due to lack of comparable industrial emission reduction policies in other competing regions.
The energy transition to a low carbon energy will imply significant investments by citizens and industry. Such level of industrial investment can only be achieved with reasonable levels of profitability, and thus comparable costs to those incurred by their competitors in 3rd countries. A competitive and investment-friendly framework, taking into account the global dimension of economy and the climate issue, is needed to allow industry to adapt. Technological innovations and breakthrough technologies together with important investments will need to be developed and scaled up to transform industry. EU will need to provide adequate innovation support to bridge the innovation valleys of death. While the 1st step to support innovation is taken, practical implementation is not there yet and it is also unclear how fast these innovations can be implemented in an economically sustainable way. The speed is affected by the critical mass that is participating in reducing GHG emissions.
Industry will have to go through profound transformations incl. switching to alternative energy and feedstock sources. Availability of abundant, secure and affordable low carbon energy will be necessary. This will require timely development and financing of adequate infrastructure (intra- and extra-EU) for energy generation, transport and energy import.
Read full responseResponse to Revision of the ETS State aid Guidelines
17 Jan 2019
essenscia welcomes this consultation, which offers an opportunity to the chemical and life sciences industry to provide its view. Granting compensations for indirect emissions costs is the necessary complement of free allowances in order to safeguard the exposed sectors from carbon leakage. Indeed, the compensation aims to maintain the global competitiveness and survivability of key industries.
There should be no discrimination between direct and indirect carbon leakage provisions: All carbon leakage risk exposed sectors and processes in the carbon leakage list should be eligible and thus covered. Next to that, sectors that reach the criteria as used in the current period or that qualify qualitatively (e.g. taking into account market distortions between competing sectors) must be added to the list of eligible sectors.
The compensation serves to counter existing competition distortion arising from the situation that installations in countries not participating in the ETS do not have to pay the same costs for combating climate change. Accordingly, these installations have a considerable and, as ETS price is rising, increasing comparative cost advantage compared to European installations. Full compensation is therefore needed and remains necessary as long as the unilateral EU ETS is not mirrored in climate related initiatives with similar scope and burden in other regions. A reduction percentage on the compensation that is currently set at the benchmark level, so reflecting the best installations in Europe and incentivising installations to outperform in efficiency, should therefore to the maximum be avoided. If an aid intensity factor is applied, it should be brought in line with EEAG (85%).
The CO2 factor for the compensation should be based on the real price impact that installations are experiencing. In the electricity market, prices are set by the marginal plant. Therefore compensation must keep mirroring real CO2 costs in electricity prices by using the CO2 cost of the marginal plant to ensure effectivity in combatting carbon leakage. There is not yet a single market price for electricity in the EU27. Moreover, the price setting areas will not necessarily match Member State borders. Therefore, the approach of a regional CO2 factor in the current guidelines, which reflect the electricity mix in a given region reflecting an interconnected market, should be maintained.
In the current guidelines the compensation is capped on historic levels (“baseline output”). This does not take into account economic growth and future electrification. Therefore, it should be brought in line with the direct allocation: the compensation should be updated as production varies.
Benchmarks should be based on the 10% best performers. Benchmarking as a principle is by definition an incentive to further improve efficiency where possible. Therefore, it is no need to make the compensation conditional upon energy efficiency investments as it would even be counterproductive for frontrunners that have invested in the past .
Read full responseResponse to Carbon Leakage List 2021 - 2030
27 Dec 2018
Essenscia, the federation of chemistry and life sciences in Belgium, wants to thank the European Commission for this consultation.
For the carbon leakage assessment, the emission intensity for each NACE4-sector was calculated. Although, in most cases, the emission data only relate to ETS installations, the GVA data available covers both ETS and non-ETS installations. Hence, the GVA is not in line with the request of Article 10b (1) of the ETS directive. Due to this, some NACE codes are wrongly excluded from a qualitative analysis. In order to ensure legal certainty in the future, correct data should be used as a basis for the calculations. The data gathering to support this calculation should therefore be ensured by Eurostat in due time.
Read full responseResponse to Amendment of the EU ETS Monitoring and Reporting Regulation (MRR)
26 Nov 2018
1) Response to phase 1 of MRR consultation
We thank you for the opportunity to comment the draft Monitoring and Reporting Regulation (“MRR”). We understand that this is only the consultation on the first step, in which clarifications and administrative simplifications are treated. The second step will deal with a number of other elements such as the MRR rules for greenhouse gases that are captured and utilised (“CCU”), both the capturing as the use of source streams. We therefore insist on the importance of a consultation regarding the second step.
2) Support for innovations
In this draft MRR an important change vis-à-vis the current version has been proposed based on the Schaefer case. It is important to mention that in this framework, recital 17 explicitly states “those conditions should not exclude the possibilities of future innovations”. We support this statement, and suggest to add it as a separate recital which applies as a general rules to the entire MRR, and not only to the change imposed by the Schaefer case. Indeed, other innovations, such as CCU, should also be supported by the MRR.
Read full responseResponse to Free allocation of emission allowances
23 Nov 2018
1)Preliminary remarks
According to the ETS Directive, the EC shall adopt implementing acts for the purpose of determining the revised benchmark values (Art.10a(2)) and to define arrangements for adjusting free allocation levels (Art.10a(20)). Decisions re the benchmark update or dynamic allocation should be separated from the FAR, which is a delegated act.
Although the explanatory memorandum mentions that this version of FAR does incorporate the comments received during several consultations, either public or with members states/stakeholders, the procedure of creating the FAR was not transparent. It is not clear how changes in methodologies are “ratified” by member states or how the input from the various participants in the expert meeting was taken into account. It is incomprehensible for us to see that this final draft version contains new elements (flaring) that again imply a substantial change of methodology compared to the current period.
2)Avoidance of administrative burden
Limiting the administrative burden is a specific concern for this regulation. Only data which are really necessary for the calculation of the allocation should be requested and collected.
- Data collection for the BM update should be limited to the years 2016-2017/ 2021-2022 as foreseen in the ETS directive, since the scope for the BM update will be larger than the one for the activity data.
- Fallback benchmarks: Fallback BM have never been based on the 10% best installations and therefore have a different methodology since the availability of resources has been taken into account. It is recommended to base the fuel and heat BM on the current methodology: choice of a technology (best technology boiler) and a widely available resource(gas) as the EC stated in its Guidance during the current period. The data collection is therefore not relevant in determining the fallback BM. This should be reflected in Recital 5: “[…] as well as providing data, where relevant, that will be used for the purposes of the implementing acts that will determine the 54 BM values […]” as well as in Recital 10, in which it should be clarified that it concerns product BM values.
- Data of relevant information only
Physical products are not relevant for heat BM installations. Only relevant products should be listed. Art.10(5)(a) should be modified as follows: “Each of the installation’s physical products relevant for benchmarks is attributed to one sub-installation without any omission or double counting;”.
The source of heat is not relevant for allocation nor for the BM. In line with Recital 21, there is no distinction in the eligibility between sources of heat. Art. 10(5)(d) should be modified as follows: “for all measurable heat produced, imported or exported by sub-installations, it is documented whether the measurable heat was produced in a combustion process within an EU ETS installation, imported from other heat producing processes or imported from non-EU ETS entities;”
The total carbon balance is not relevant for allocation nor for the benchmarks. Article 10(5)(g) should be deleted.
3)Consistency in methodology
At this stage we see some inconsistencies between the current legislation and the new FAR. It is important to maintain the consistency and full comparability between the current trading period and the next trading period. Changes in methodology should be avoided.
- Fallback BM:see supra
- Reference level should be based on median and no on arithmetic mean.
- Definition of waste gases is restricted to gas and should be deleted. Similarly, the definition of process emissions is more restrictive than the existing one and should be adapted.
-BM scope should be kept unchanged: The product BM will be reduced by the annual historical emissions stemming from waste gases flared,with the exception of safety flaring. This is a methodology change and therefore the new paragraph under Art.16(5) “From 2026, [...]" should be deleted.
Read full responseResponse to Strategy for long-term EU greenhouse gas emissions reductions
24 Jul 2018
essenscia, the Belgian Federation for Chemistry and Life Sciences Industries, welcomes a new strategy for long-term greenhouse gas emissions. Such strategy can only be developed in a correct way if it includes a deep and calculated impact assessment of EU policies vis-à-vis possible policy scenarios in other regions.
Key in the transition to a global low-carbon and competitive economy will be the investment in innovation, leading to cost competitive technologies that will drive emissions reductions not only in Europe, but also in other regions and that positively contribute to EU’s economy with net added value and international competitive position. Therefore, EU policies should focus on the development of successful technologies.
Read full responseResponse to Revising the rules for free allocation in the EU Emissions Trading System
17 Apr 2018
I.Preliminary remark
According to the ETS Directive, the EC shall adopt implementing acts for the purpose of determining the revised benchmark values (Art. 10a(2)) and to define arrangements for adjusting free allocation levels in case of increase or decrease of operation (Art. 10a(20)) . Therefore, neither the benchmark update nor the dynamic allocation can be included in the allocation rules (delegated act).
II. Activity level
a) Reference level should be based on median
According to article 11(1) of the ETS Directive, free allocations given to individual installations must be calculated from the data of the years from 2014 to 2018. The reference level should be based on the median (as done in the past).
b) Adjustment of activity level due to production change: need for absolute threshold
Recital 12 of the ETS Directive foresees the possibility to use absolute thresholds above which an adjustment of the amount of free allocation in case of changes in production is made. Corrections to allocation should be done if the production level increase/decrease leads to a change in the allocation of more than 50 000 allowances. This is necessary to avoid a competitive disadvantage for member states with large environmental permits.
c) Determination of historical activity level for new installations
New installations should receive allocations in order to stimulate new investments.
At first, we suggest a preliminary allocation based on an extrapolation of the first 6 months (in conformity with the current period) whereby the allocation is determined on the basis of the average of the first 6 months after the start-up (not as from the environmental permit). The dynamic allocation will subsequently provide an adjustment if this initial value is too high or too low.
Furthermore, we refer to the principle as used in the current allocation period that provides for an allocation based on grandfathering during the start-up phase of a new installation. This might be necessary in the year proceeding the first year of operation.
III. Benchmark update
a) Limit administrative burden
Data collection for the benchmark update should be limited to the years 2016-2017/ 2021-2022 as foreseen in the ETS directive since the scope for the benchmark update will be larger than the one for the activity data.
b) Product benchmark
According to recital 11 and article 11 of the ETS Directive, the benchmark values should be updated considering the average performance of the 10% most efficient installations. Non-representative installations should be excluded from the calculation. An installation is deemed to be non-representative if its process (e.g. technology) or its operating conditions (e.g. use of particular raw materials or fuel) cannot be replicated everywhere in Europe.
Heat which is imported by or exported from sub-installations with a product benchmark should be valued at the same carbon or heat content as in the heat benchmark.
c) Fallback benchmarks
Fallback benchmarks have never been based on the 10% best installations and therefore have a different methodology since the availability of resources has been taken into account. Resources that are not sufficiently available to fuel heat generation at European scale are not a realistic target. Therefore, it is recommended to base the fuel and heat benchmark on the current methodology: natural gas boiler. The data collection is therefore not relevant in determining the fallback benchmark.
Efficiency improvements in steam generation should be in line with the Energy Efficiency Directive.
Moreover, it is important not to penalize investments in energy efficiency when calculating the activity level linked to a changing production.These potential “unintended results” of the better alignment for fallback benchmarks need to be well addressed.
Read full responseResponse to Carbon Leakage List 2021 - 2030
10 Nov 2017
The ETS has a significant impact on the competitiveness of energy-intensive industries, due to EU-specific direct costs (purchase of ETS allowances) and indirect costs (CO² as element of electricity price). Today, energy costs in the EU are higher than in other industrialised regions relevant for international competition. Unlike the power sector, energy-intensive industries cannot pass through their carbon costs to consumers without losing market share to their non-EU competitors. Companies that already meet the highest standards cannot make drastic improvements or technology shifts.
Higher carbon costs without proportionate carbon leakage provisions would inevitably erode margins and hinder the industry’s ability to provide for innovative solutions for the climate problem and for a sufficient return on investments in the long term. This would make non-EU-countries a more attractive place to invest and impact adversely on jobs and growth prospects in the EU.
For the European chemical industry to remain competitive, it is therefore important that market-based mechanisms like the ETS do not create unilateral financial burdens that risk directing resources away from innovation and investments.
Free allocation at the level of the 10% best installations in a sector
essenscia states that carbon leakage provisions for eligible sectors are meant to effectively prevent undue carbon costs. Europe designed the protection at the level of the most efficient installations in these sectors. Accordingly, all eligible companies should receive free allocation at the level of the 10% best installations in a sector. Reducing this amount will undermine the objective and unduly expose companies to the risk of carbon leakage.
Trade intensity calculation
essenscia believes that currently, the EU efforts are unmatched and there are no comparable efforts and equivalent measures to the EU ETS with an operating emissions trading scheme and an absolute reduction target and reduction pathway outside of the EU. Therefore, essenscia objects against removing regions with climate policies from the statistics to be used for trade intensity calculation if not accompanied with a detailed analysis of the climate policy and resulting burden on manufacturing industry. Indeed, only regions with climate policies with a similar burden and scope could be removed.
Inclusion of the assessment of the value chain effects
Carbon leakage protection and free allocation should include an assessment of the value chain effects. Sub-sectors are not only impacted by their direct emissions and energy costs that are inflated by climate policies but also indirectly by the extra costs of exposure of up- or downstream sectors. This indirect effect must be taken into account. An example is the cost of industrial gasses that are delivered to other subsectors in the chemical industry. Higher production costs will lead to undue burden on the receiving sectors that are exposed. Therefore, the precautionary principle should be applied.
Indirect emissions
The exposure to international competition should consistently be used in the EU Climate policies, so it should serve as a basis for the compensation of indirect emissions.
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