31st January, Brussels – As the EU debates whether to raise border tariffs on cement, new research by environmental think-tank Sandbag shows the proposed tariffs can create better incentives to cut cement emissions and reward companies that produce low-carbon cement.
In mid-February, the full European Parliament will vote on whether to adopt a new border adjustment mechanism (BAM) proposed by the Parliament’s Environment Committee. A BAM would essentially require importers of cement and clinker into the EU to surrender emissions permits corresponding to the embedded carbon in their products – just as domestic EU cement manufacturers are required to do at present. At the same time, cement, would no longer receive free allocation.
Previous research carried out by Sandbag revealed the EU Emissions Trading Scheme has actually driven cement emissions higher, whilst other European and national regulations and product standards discriminate against low-carbon cement companies.
Over the last decade, the EU carbon market delivered more than €4.7 billion in windfall profits to fatcat cement companies.
However, border taxes could finally set cement producers on a level playing field by harmonising incentives to reduce product emissions within the EU.
Wilf Lytton, an analyst at Sandbag, commented:
“The EU can now implement a pragmatic and politically feasible solution for boosting low-carbon cement in Europe, and ending the scandal of enormous windfall profits to cement companies.
However, this isn’t simply about cement. In a world of developing carbon markets with no unified set of rules, it is necessary to account for discrepancies in order to avoid offshoring of production. Ultimately free allocation to industry is only a temporary solution and border adjustment measures are a means to protect industry while offering greater rewards to those who reduce their emissions.”
The briefing is being launched today at an event in the European Parliament, Brussels (12.30-14.00). More details below:
The Cement Industry of the Future
January 31st | 12:30-14:00
European Parliament, Room A5E-1
Hosted by Bas Eickhout MEP
A Sandbag, InfluenceMap, and Carbon Market Watch event
Tarek Soliman – CDP
Wilf Lytton – Sandbag
Atle Lygren – EMC
Agnes Brandt – Carbon Market Watch
Matilda Axelson – Institute of European Studies
Donal O’Riain – Ecocem
Jytte Guteland MEP (S&D)
Ahead of the plenary vote on ETS reform, please join us for a lunch debate to hear from stakeholders how proposed amendments to the carbon market, including border adjustment measures, could drive low-carbon innovation in the European cement sector.
With perspectives from the cement industry, MEPs, investors, technical experts and NGOs.