* EU draft maps out industry carbon emission benchmarks
* Some sectors oppose benchmark calculations
By Pete Harrison and Nina Chestney
BRUSSELS, Oct 6 European Union benchmarks for
cutting carbon emissions from manufacturing have now been
drafted, leading to industry complaints the plan will harm
steel, cement and fertiliser producers.
The EU aims to cut carbon dioxide emissions to 20 percent
below 1990 levels over the next decade. Its main tool for doing
that is its Emissions Trading System (ETS), which forces
companies to buy permits called EU Allowances for each tonne of
carbon they emit.
Carbon output is capped, and year by year that level is
ratcheted down. The complex process of "benchmarking" defines
how many permits manufacturers will get for free during
Industry sources say the draft rules take insufficient
account of how steel installations recycle waste gases as an
additional source of energy, while the cement and fertiliser
industries also object to how their benchmarks are calculated.
The draft is still subject to changes and further debate
among EU experts before it goes through.
The ETS is expected to force a 21 percent cut in emissions
from the industries it covers by 2020, many of which have
complained the costs will hurt their competitiveness and force
them to relocate factories to less-regulated regions overseas.
To prevent that happening, some sectors will be given free
permits under a revised system from 2013. To avoid handing free
permits to the biggest polluters, the EU has created a system
known as "benchmarking", now the subject of heated debate among
technical experts in Brussels with billions of euros at stake.
Benchmarks are set as the average emissions of the most
efficient 10 percent of installations in any sector. Only the
factories that stay within the benchmarks will receive all their
allowances for free.
Less efficient factories will receive only some of their
allowances for free, according to a sliding scale.
The benchmark for non-alloy aluminium was set at 1.514
tonnes of CO2 per tonne of product produced, lime was at 0.954
tonnes and grey cement clinker was 0.716 tonnes, according to a
draft document seen by Reuters on Wednesday
Industry group BusinessEurope said the Commission's proposal
was too restrictive in its definition of new investments and it
based it calculations on a period in which Europe had its worst
recession in 80 years when industrial emissions were lower than
"The Commission methodology takes in the crisis years, and
we don't think that is a fair approach," said BusinessEurope's
Deutsche Bank analyst Mark C. Lewis said the benchmarks
would make industrial companies cautious about selling surplus
EUAs in the second phase of the EU ETS (2008-2012).
(Reporting by Pete Harrison; editing by Keiron Henderson)