"Climate & energy policies: post 2020 EU ETS" by Dr Laura Cohen, CEO of British Ceramic Confederation. Presentation made at the 15th European Parliament Ceramics Forum on 3 December 2014.

1. EUROPEAN PARLIAMENT CERAMICS FORUM
Post 2020 EU ETS
Dr Laura Cohen, Chief Executive, British
Ceramic Confederation
3 December 2014

2. The EU ETS and the ceramic industry
• More than 1,200 ceramic installations
‒representing around 10% of total number of installations
• Less than Mt 14 in 2013
‒less than 1% of emissions
• Around 80% of installations are “small” (<25 ktonnes)
• Energy intensive sector with long investment cycles
• Ceramic Industry Roadmap

3. Post 2020 EU ETS
• The system is at another crossroads
• A new balance needs to be defined:
• Variables of the equation: security, sustainability, affordability
• Known elements:
‒ Ambitious 2030 decarbonisation target overall
 -40% by 2030; -20% by 2020 vs. 1990
 More challenging for ETS sectors: -43% in 2030 vs. 2005; -21% in 2020 vs 2005
‒ Steeper decarbonisation path (Cap: -2.2% annual linear factor vs. 1.74%)
‒ Increasing prices for carbon and energy
‒ Possible Market Stability Reserve
‒ Continuation of carbon leakage measures BUT
 Which sectors?
 What level of protection?
 For how long?

4. Post 2020 carbon leakage
• If the ceramic industry is excluded from the post 2020 carbon leakage
provisions, it will have to purchase on average 90% of the allowances by 2030
(more than € 4bn*)
*assuming €30 / tonne and production rate increase at 1% / year

5. Our policy recommendations for post 2020 ETS
• Predictable and stable legal framework
• No change to pre 2020 framework
• Carbon leakage protection proportionate to the level of ambition
‒ Remove cross sectoral correction factor
‒ Compensation for indirect costs
• Address technical and economic feasibility
• Address complexity of partial cessation and capacity change rules – e.g. support
major investment
• Consider international context – protection while no equivalent commitments
• Market Stability Reserve has to be taken in context of holistic structural reform
• More focus on untapped potential in non-ETS sectors like buildings

6. Thank you for your attention!

7. Thank you for your attention!