EU Manufacturers Urge Focus on Industry Growth in 2030 Policies

The European Union must ensure that its policies foster the growth of industry when it decides about new climate and energy goals for 2030, manufacturers including ArcelorMittal and RioTinto Alcan said.

A group of 137 companies, which also includes ThyssenKrupp Steel Europe and Tata, called on EU leaders to propose concrete steps to boost the share of the European industry’s share in the bloc’s economy and avoid carbon costs for companies prone to relocation of production abroad, according to a statement published in Brussels today. They also urged an overhaul of the EU emissions market and action to reduce the energy price gap with the U.S.

“EU economic recovery and reversing trends in employment will not happen without industry,” the group said. “Enabling the manufacturing industry to grow will not only stimulate innovation in technologies and products but consolidate EU’s leadership in the reduction of carbon emissions.”

The 28-nation EU is seeking to reconcile its ambition to lead the global fight against climate change with efforts to help the economy regain steam. Heads of state and government are to have their first debate on 2030 climate and energy strategies proposed by the European Commission when they meet in Brussels at a summit on March 20-21.

The EU should tighten its greenhouse-gas reduction target to 40 percent in 2030 compared with 20 percent in 2020, according to the commission, the EU’s regulatory arm. The carbon goal would be the single one legally binding on member states after 2020 and national targets for renewable energy will be discontinued, the commission proposed in January.

Reduction Targets

Too strict greenhouse-gas reduction targets would stop investments in carbon-intensive industries in Europe, according to the manufacturers’ statement. They called for an overhaul of mechanisms to compensate energy-intensive industry for costs relating to emissions and passed on in electricity prices and changes to the EU emissions trading system to make it more flexible. The ETS, the world’s biggest carbon market, imposes decreasing pollution caps on about 12,000 installations.

“Energy-intensive industries are already energy efficient compared to global competitors,” they said. “Technical limitations and the need of significant resources and lead time for further improvement mean that the allocation of emission allowances under the ETS must be based on realistic benchmarks and actual production.”

The debate about future climate policies comes as electricity prices in some regions of Europe double those in the U.S., the bloc’s main trading partner. Regulatory costs, such as subsidies for renewables, taxes and network costs, are the main reason for the widening gap, according to the statement today.

“Restoring global energy costs competitiveness is a priority,” according to the manufacturers. “Solutions exist but must address all energy costs components and require strong political support.”

To contact the reporter on this story: Ewa Krukowska in Brussels at ekrukowska@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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