Corporate Europe Observatory

Exposing the power of corporate lobbying in the EU

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Paying the polluters

Industry lobbying on EU climate policy looks set to secure further subsidies for energy-intensive industries through the reform of State Aid, according to a new report, Paying the Polluters: EU emissions trading and the new corporate electricity subsidies, published by Corporate Europe Observatory and Carbon Trade Watch. The report shows how the Commission's proposals have opened the door to millions of euros of subsidies to help some of the biggest polluters pay their energy bills.

A new European Commission measure has opened the door to the granting of millions of euros worth of subsidies to help the continent’s largest corporate polluters with their electricity bills. This report shows how:



- A proposed reform to the European Commission’s State Aid rules will allow member states to compensate industry for increases in electricity charges incurred as a result of the Emissions Trading System (ETS). Already, the UK Government has committed to covering these costs – as part of a £250 million (€300 million) commitment to “compensate key electricity-intensive businesses to help offset the indirect cost of the carbon price floor (a national initiative to set a minimum carbon price) and the EU Emissions Trading System.”



- Some of the corporations that stand to benefit most from these new electricity subsidies have already profited massively from the ETS , most notably those in the steel sector. Eurofer, the European steel industry lobby group, has called for compensation despite over-allocations of pollution permits to the steel sector that could be worth billions of Euros.



- The aluminium sector, represented by industry association Eurometaux, has also successfully lobbied for its compensation claims to be included in draft EU rules. Its submissions have massively overstated the impact of the ETS on the sector, while conveniently understating the real drivers of outsourced production, such as trade rules and cheap labour. In fact, much of the aluminium sector enjoys long-term contracts with private electricity suppliers at far lower rates than those paid by domestic consumers.



- The proposed reform of State Aid rules exposes significant flaws in how the Commission assesses “carbon leakage,” the perceived risk that caps on EU emissions could price business out of Europe and into less regulated markets, which would in turn contribute to an overall increases in greenhouse gas emissions. The price estimates lobbyists proposed to assess the risks are over five times the current or projected carbon price.

Attached files: 
A new European Commission measure has opened the door to the granting of millions of euros worth of subsidies to help the continent’s largest corporate polluters with their electricity bills. This report shows how:- A proposed reform to the European Commission’s State Aid rules will allow member states to compensate industry for increases in electricity charges incurred as a result of the Emissions Trading System (ETS). Already, the UK Government has committed to covering these costs – as part of a £250 million (€300 million) commitment to “compensate key electricity-intensive businesses to help offset the indirect cost of the carbon price floor (a national initiative to set a minimum carbon price) and the EU Emissions Trading System.”- Some of the corporations that stand to benefit most from these new electricity subsidies have already profited massively from the ETS , most notably those in the steel sector. Eurofer, the European steel industry lobby group, has called for compensation despite over-allocations of pollution permits to the steel sector that could be worth billions of Euros.- The aluminium sector, represented by industry association Eurometaux, has also successfully lobbied for its compensation claims to be included in draft EU rules. Its submissions have massively overstated the impact of the ETS on the sector, while conveniently understating the real drivers of outsourced production, such as trade rules and cheap labour. In fact, much of the aluminium sector enjoys long-term contracts with private electricity suppliers at far lower rates than those paid by domestic consumers.- The proposed reform of State Aid rules exposes significant flaws in how the Commission assesses “carbon leakage,” the perceived risk that caps on EU emissions could price business out of Europe and into less regulated markets, which would in turn contribute to an overall increases in greenhouse gas emissions. The price estimates lobbyists proposed to assess the risks are over five times the current or projected carbon price.
Partner organisation: 
 
The International Civil Aviation Organization is expected to agree a new climate deal at its current assembly meeting. But its promise of “carbon neutral” flying through voluntary carbon offsetting is delusive, posing new threats to the environment and communities.

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...

The European Food Safety Authority (EFSA) told CEO today, and publicly announced on their website, that they would disclose most of the raw data of studies on glyphosate used in the EU's toxicity assessment of glyphosate.
In an attempt to fix its public image, Dieselgate-shaken Volkswagen names former EU Climate Commissioner Connie Hedegaard as member of its new ‘Sustainability Council’. Although the role is unpaid, it is highly questionable whether Volkswagen is actually committed to making up for its previous foul play.
The Commission proposal for 'mandatory' transparency register is a disappointment. Its measures will do little to help journalists, civil society and citizens scrutinise the corporate lobbies trying to manipulate EU policies in their favour.
Corporate Europe Observatory is looking for an experienced, creative and dynamic outreach and mobilisation organiser to strengthen our visibility as well as public engagement with CEO's work in countries across Europe. The 13-month contract will run from 1 December 2016 to 31 December 2017.
 
 
 
 
 
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