CAN Europe Position on Benchmarking and allocation rules in phase III of the EU Emissions Trading System

Climate action

CAN Europe Position paper on Benchmarking and allocation rules in phase III of the EU Emissions Trading System

CAN-Europe’s key recommendations on EU-wide benchmarks

  • No EU ETS installations (due to e.g. specific technologies, material quality, climatic and national circumstances) can be excluded from the benchmark curves.
  • There can be no discrimination between existing and new installations.
  • Benchmarks have to account for technological improvements over time. Therefore the 2007-2008 vintage benchmark has to be adjusted with a pre-determined annual improvement factor.
  • Due to the importance of the refinery sector and concern about data access and transparency, we urge the European Commission to execute an additional independent and external data and methodology audit after the first verification of data coming from this sector.
  • Benchmarks need to be based on product output and not on input, regardless of the list of activities in Annex I of the directive.
  • The use of a “clinker” benchmark is unacceptable and will harm the environmental and economic integrity of future climate policies. A “cement” benchmark has to be applied.
  • In case a product benchmark for a sector or sub-sector cannot be determined because there are just a handful producers of this product in the EU, the product benchmark has to be set at the level of the most efficient European producer.
  • Fall back approaches are acceptable if and only if they guarantee equal treatment between sectors and installations AND safeguard the environmental integrity of the applied benchmarks.
  • The fall-back “heat production benchmark”, needs to be corrected with the introduction of a generic “heat end-use efficiency” improvement factor, as to include end-use efficiency improvements.
  • A “fuel mix benchmark” as fallback for combustion processes other than the ones for steam and hot water production might not be necessary. Many furnaces can be “heat benchmarked” by looking at the thermal efficiency and internal heat transfer parameters of the installation.
  • The heat production and fuel mix benchmarks need to take into account ALL criteria mentioned under article 10a para 1 of the emissions trading directive with specific reference to the potential use of biomass.
  • A heat-benchmark (or fuel-mix benchmark) using an emission factor of natural gas is too high because it excludes the use of biomass from the average of the 10% most GHG-efficient installations.
  • Grandfathering for non-fuel related process emissions and waste gases is unacceptable. Again, such approach does not take into account the list of criteria under art 10a para 1 of the Emissions Trading directive.
  • The total amount allowances allocated should be equal, regardless of the greenhouse gas permitting situation of the installations with a technical link.

Download  Position paper on Benchmarking and allocation rules in phase III of EU ET