Corporate Europe Observatory

Exposing the power of corporate lobbying in the EU

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Industry hits carbon leakage jackpot

Industry lobbying on emissions trading scheme hits the jackpot: the cases of Arcelor Mittal and LafargeIndustry is currently claiming that a 30% climate emissions reduction target will result in carbon leakage - because companies will be forced to relocate from Europe. New research from CEO shows how heavy industry has already succeeded in using this argument to lobby for free permits under the Emissions Trading Scheme - and how companies including Arcelor Mittal and Lafarge have made windfall profits as a result. CEO research shows how lobbying by heavy industry exagerates the threat of carbon leakage. The cases of Arcelor Mittal and Lafarge.
arcelor

Climate Change Commissioner Connie Hedegaard has indicated that the EU could increase the EU target for CO2 emission cuts to 30% by 2020, from 20%. The suggestion, currently being discussed by the Commission, has intensified opposition from energy intensive industries, including the cement and steel sectors, which have repeated threats that they will be forced to relocate outside the EU. Yet recent figures show that industry has benefited significantly from EU climate policy. Arcelor Mittal, Lafarge and other companies will have a huge surplus of CO2 emissions permits at the end of the second phase of the EU's emissions trading scheme (ETS) in 2012, just as in phase one (2005-2007). These permits were received free of charge and are worth hundreds of millions of euros. Research by Corporate Europe Observatory shows how these companies have lobbied EU institutions intensively to ensure they retain these benefits in the next phase of the ETS (2013-2020). By using threats of relocation and increased global emissions (carbon leakage), plus scaremongering about massive job losses, these industries have managed to ensure that the ETS will remain a way of providing significant subsidies for some of Europe's worst polluters.

The European Commission has an opportunity to reverse this situation in the next few weeks. By June 2010 it has to submit its assessment of the proposal for dealing with carbon leakage. The huge assets gained by European manufacturing industries reveal the flaws in their claims. They should not be entitled to more free allocations. In the same way, the Commission must resist industry's demands and move quickly to go beyond a 30% commitment.

Download the report

Climate Change Commissioner Connie Hedegaard has indicated that the EU could increase the EU target for CO2 emission cuts to 30% by 2020, from 20%. The suggestion, currently being discussed by the Commission, has intensified opposition from energy intensive industries, including the cement and steel sectors, which have repeated threats that they will be forced to relocate outside the EU. Yet recent figures show that industry has benefited significantly from EU climate policy. Arcelor Mittal, Lafarge and other companies will have a huge surplus of CO2 emissions permits at the end of the second phase of the EU's emissions trading scheme (ETS) in 2012, just as in phase one (2005-2007). These permits were received free of charge and are worth hundreds of millions of euros. Research by Corporate Europe Observatory shows how these companies have lobbied EU institutions intensively to ensure they retain these benefits in the next phase of the ETS (2013-2020). By using threats of relocation and increased global emissions (carbon leakage), plus scaremongering about massive job losses, these industries have managed to ensure that the ETS will remain a way of providing significant subsidies for some of Europe's worst polluters. The European Commission has an opportunity to reverse this situation in the next few weeks. By June 2010 it has to submit its assessment of the proposal for dealing with carbon leakage. The huge assets gained by European manufacturing industries reveal the flaws in their claims. They should not be entitled to more free allocations. In the same way, the Commission must resist industry's demands and move quickly to go beyond a 30% commitment. Download the report
 

It's almost six months since EU Climate Commissioner Miguel Arias Cañete claimed to have negotiated an historic global deal to tackle climate change at COP21in Paris. The 3 May also marked a year and a half of Cañete being in the job. However, he and his his boss, Vice President of the Commission Maros Šefčovič, continue to give privileged access to fossil fuel players trashing the climate, who have enjoyed eight meetings to every one involving renewable energy or energy efficiency interests since the Paris deal was signed. Rather than a change of direction, it's business as usual for the European Commission following the Paris Agreement, which is great news for Big Energy but a disaster for those serious about tackling climate change.

In the middle of May over 4000 people from all over Europe gathered in the Lusatia region in Eastern Germany. The plan? To block a Vattenfall-owned opencast lignite mine.

In light of the ITRE Opinion and forthcoming discussion on the proposed Directive to reform the Emissions Trading System (and “enhance cost-effective emission reductions and low-carbon investments”), CEO offers comments. 

Ultimately, revisions of this sort are nowhere near enough. The new ETS Directive requires some "damage limitation." But it is also a time to reflect on the need to move beyond emissions trading at the heart of EU climate policy. There are many ways to achieve this: http://corporateeurope.org/climate-and-energy/2014/01/life-beyond-emissi...

A revised Emissions Trading Directive is like red meat for the hungry pack of lobbyists that work the corridors of Brussels’ political institutions. Even minor differences in how pollution permits are handed out can result in profits or savings of millions of euros to big polluters.

A few weeks after the May coup against Dilma Rousseff by conservative parties backed by the country's largest corporations, Brazil's “interim” government, led by Michel Temer, signed an emergency loan to the State of Rio de Janeiro to help finance infrastructure for the 2016 Olympics. The bailout was conditional to selling off the State's public water supply and sanitation company, the Companhia Estadual de Águas e Esgotos (Cedae). 

When we interviewed City Councillor and chair of Rio’s Special Committee on the Water Crisis Renato Cinco, in December 2015, he was already warning against such privatisation threats and provided important background information on the water situation in Rio.

Never before has a former European Commission official been criticised as much for his post-EU career as ex-Commission president Barroso upon joining infamous US investment bank Goldman Sachs this summer. Citizens are outraged and evidence already points towards a gross violation of the EU Treaty.

Following the high-level appointment of former European Commission President José Manuel Barroso to Goldman Sachs, NGOs have launched a petition demanding stricter rules for ex-EU commissioners’ revolving door moves.

Corporate Europe Observatory's new report 'A spoonful of sugar' illustrates how the sugar lobby undermines existing laws and fights off much-needed measures that are vital for tackling Europe’s looming obesity crisis.

 
 
 
 
 
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