No back tracking on Europe's Green Deal

No back tracking on Europe's Green Deal
14 October 2022

The introduction of the Carbon Border Adjustment Mechanism (CBAM), energy price rises and implementation of carbon capture, utilisation and storage (CCUS) across Europe have heightened fears that the Green Deal may become harder to see out for EU countries. Discussions may well move some of the pricing for taxes and levies, but the European Commission is clear that there will be no backtracking on its environmental commitments to reduce greenhouse gas emissions by at least 55 per cent by 2030.

This week, CEMBUREAU held its in-person and online meeting on 'Cementing Europe's Future: Driving Innovation towards carbon neutrality', which gave Frans Timmermans, executive vice president of the European Commission the platform to update the cement sector on the revision of the EU Emission Trading Scheme (ETS) and introduction CBAM, while addressing the impacrt of the current energy crisis on the cement sector. 

Mr Timmermans claimed that CBAM is already working in that other cement markets outside the EU are asking how they can avoid CBAM? "The answer is very simple, to have the same carbon footprint as our industries," he said. CBAM is required to prevent carbon leakage and it is already leading partners and competitors to decarbonise. "We still need CBAM to be in place. We need legislation so that we force our partners to decarbonise, or that we protect our industry because competition is unfair," he added. From 2026, the free allowance will be gradually reduced and CBAM levels will be introduced. "CBAM is a safety valve for fair competition," said Mr Timmermans.

Meanwhile, at Cemtech Europe Conference 2022 in Barcelona, Spain, Peter Hoddinott presented a paper on CBAM which highlighted global CO2 emissions from fossil fueld and industry had risen in 2021 by six per cent, reaching a new peak of 36.3Bnt. Emission reduction policies have been slow to take effect. Mr Hoddinott also claims that Turkish importers are looking for a fairer deal on CBAM, while the implementation of CBAM still has to pass World Trade Organisation (WTO) regulations and could see cement prices more than double by the mid-2030s.

If there is still a lot of debate about CBAM ahead for the industry, the EU-ETS is something that cement producers have become more accustomed to, and is not to be revised greatly, argued to Mr Timmermans. He explained that it is now a well understood market tool. "The price of ETS has fallen to EUR70/t CO2 emitted in recent months from a peak of EUR90/t of CO2 emitted," he commented. "The forecast of European recession has seen prices fall."

Energy concerns
The energy crisis has been weaponised by President Putin of Russia and is therefore not just a market problem, claimed Mr Timmermans. As current prices are unsustainable, "public authorities have an obligation to intervene," he added. The EU Commission has proposed those making huge profits from the energy circus should show solidarity and the profits reinvested to overcome the current crisis. Other proactive moves will be to use less gas and reduce fuel use at peak hours of demand. Mr Timmermans also pointed out that countries need to act together it was unhelpful for countries competing against each other which is driving energy prices up further. "Price caps are required," added Mr Timmermans, as well as the collective understandings like we had during the COVID-19 pandemic.

Carbon capture utilisation and storage
Moving on to CCUS, Mr Timmermans admitted that carbon capture is very important for cement’s future. "While it is not a silver bullet, it is part of the solution," he commented. The EU Commission announced four projects this summer that will have European Innovation Funding for CCUS in the cement sector: Lägerdorf (Germany), Kujawy (Poland), Devnya (Bulgaria) and the Réty lime plant (France). Mr Timmermans drew attention to the initiatives for carbon storage in the USA. Another goal is to close the loop to make cement a circular economy. 

Carbon neutrality research
Meanwhile, Joanna Drake, deputy director of DG Research & Innovation of the European Commission, spoke on getting heavy industry’s decarbonisation projects up to scale. Ms Drake reminded listeners at CEMBUREAU's meeting that the Commission's Technical Roadmap was only recently released in June and there is no time to waste to implement it, if we are to reach climate neutrality. "The high truth now is to move from Roadmaps to action," said Ms Drake who highlighted the need for collaboration, acceleration in developing breakthrough technologies and lowering the risk for project authorisation. "We need a timeframe squeeze. We need more projects and joined up action with regularisation matching this movement," added Ms Drake. 

The EU Commission has already funded 75 decarbonisation projects in the hard-to-abate sectors to take them to full deployment. The cement sector started with a low intensity of research, but considerable action has been taken. Now the emphasis should be on synergising with other funds and creating blendable policies, Ms Drake suggested.

Ms Drake concluded that funding is exposed to the recent energy crisis. However, the Commission and member states have acted to ease the higher energy prices and buffer households. "The energy crisis will not detract us from the Green Deal. There is no room for complacency," Ms Drake announced. "The reduced consumption of gas is all coming from our commitment to the Green Deal, as well as climate neutrality, and for innovation in Europe. We can't backpedal from that."

Published under Cement News