#3rd base band free#
In phase 3 of the EU ETS, for each ETS installation, the amount of free allocation is calculated based on a formula where its production quantity (in tonnes of product) is multiplied with the benchmark value for that particular product (measured in emissions per tonne of product). Sectors facing carbon leakage receive higher share of free allocation The cost estimate referred to above takes into account that sectors not on the carbon leakage list are also eligible for some free allocation. the non-EU trade intensity is above 30%.the sum of direct and indirect additional costs is at least 30% or.the sector's trade intensity with non-EU countries (imports and exports) is above 10%.Ī sector or sub-sector is also deemed to be exposed if:.direct and indirect costs induced by the implementation of the directive would increase production cost, calculated as a proportion of the gross value added, by at least 5% and.In phase 3, a sector or sub-sector is considered to be at significant risk of carbon leakage if: For phase 4 (2021-2030), a new list was adopted by the Commission in February 2019 and published in May 2019.ĭefining significant risk of carbon leakage (for the current list 2015-2020).In 2017, it was decided that this list will also be valid for 2020. The second list was applied in 2015-2019.The first list was applied in 2013-2014.The European Commission draws up the list with the agreement of Member States and the European Parliament, following an impact assessment and extensive consultation with stakeholders.
There is an official list of sectors and sub-sectors considered to be at a significant risk of carbon leakage. This policy will continue in phase 4 (2021-2030), but based on more stringent criteria and improved data. To safeguard the competitiveness of industries covered by the EU ETS, the production from sectors and sub-sectors deemed to be exposed to a significant risk of carbon leakage receives a higher share of free allowances compared to the other industrial installations. The risk of carbon leakage may be higher in certain energy-intensive industries. This could lead to an increase in their total emissions. Under the EU emissions trading system (EU ETS), industrial installations considered to be at significant risk of carbon leakage receive special treatment to support their competitiveness.Ĭarbon leakage refers to the situation that may occur if, for reasons of costs related to climate policies, businesses were to transfer production to other countries with laxer emission constraints.
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