Federazione Imprese Siderurgiche Italiane

FEDERACCIAI

Federacciai è la Federazione che rappresenta le Imprese Siderurgiche Italiane, fa parte di Confindustria e conta ad oggi circa 150 aziende associate che realizzano e trasformano oltre il 95% della produzione italiana di acciaio.

Lobbying Activity

Response to Revision of the ETS State aid Guidelines

17 Jan 2019

15 January 2019 COMBINED EVALUATION ROADMAP / INCEPTION IMPACT ASSESSMENT Revision of EU ETS State aid Guidelines FEDERACCIAI CONTRIBUTION TO THE CONSULTATION Compensation of indirect ETS costs, together with the recognition of free allowances for direct emissions, are both indispensable and equally important tools for tackling carbon leakage risk (direct and indirect) and thus protecting the competitiveness of industrial sectors exposed to international competition. However, while the allocation of free allowances for direct emissions is a strictly harmonised instrument at EU level, the possibility of offsetting indirect costs, as well as the level of compensation itself, is at the discretion of individual Member States. This creates a serious imbalance, since an instrument of vital importance for some sectors, explicitly designed to limit the competitive gap with non-EU countries, if applied only in some member states and in a non-harmonized manner, inevitably ends up altering the level playing field on the EU internal market. Companies located in countries that do not guarantee compensation (as is currently the case in 17 out of 28 Member States) suffer, and would continue to suffer in the future, a double competitive disadvantage, both vis-à-vis competitors outside the EU and vis-à-vis competitors in the same sector in other EU countries. A solution to this problem, by the weakening the instrument through a reduction of the amount of possible compensation to a minimum (option mentioned in the consultation document), is clearly not acceptable, as it would effectively remove, during the application phase, the main instrument introduced by the ETS Directive to defend the sectors most exposed to indirect carbon leakage. Moreover this would happen at a time when the price of CO2 allowances is rising rapidly and ETS charges are increasingly being passed through in the price of electricity. On the contrary it is essential that the instrument is kept strong and effective, ensuring a high level of compensation, but at the same time is rethought in such a way as to ensure a mandatory and uniform application in all Member States. In particular Financial compensation for the ETS costs transferred to the price of electricity is essential to safeguard the competitiveness of the steel sector as a whole and plays a decisive role for the EAF steel industry, based on the virtuous recycling of ferrous scrap and its melting through electric arc. As is well known, this production process, for which Italy the leader in Europe, while requires an high specific consumption of electricity (indirect emissions), allows at the same time very significant environmental advantages in terms of circular economy and reduced direct emissions. For these reasons it is fundamental that: • The European steel sector as a whole should be maintained in the list of eligible sectors, taking into account its high energy intensity and equally high exposure to global competition. • Measures must be introduced to ensure binding and homogenous application in all Member States, including the possibility to amend, where appropriate, the ETS Directive. • The digressive aid intensity cap should be eliminated, as the calculation is already based on very strict benchmarks reflecting the best achievable performance. • The amount of compensation shall be calculated taking into account the relevant marginal emission factor (CO2/MWh) which effectively determines the indirect costs transferred into the electricity price. Fossil power generation will remain the relevant price factor defining indirect costs, even taking into account the increasing trend in renewables.
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