‘Imports should pay for climate change costs’

Günter Verheugen, the European enterprise and industry commissioner, has said that foreign manufacturers should have to join the EU’s emissions trading scheme (ETS) unless Europe’s industries are compensated for the cost of measures to tackle climate change.

In a speech to the European Parliament’s climate change committee on Monday (19 November), Verheugen said that the EU "could not afford" its energy-intensive industries, such as steel and cement makers, to lose competitiveness compared to producers in countries which did not impose environmental measures.

This should be taken into account both in the EU’s trade policy and the future ETS, he said. "That can mean that we reward efficient plants in the allocation of [emissions] rights or bring importers into the EU’s emissions trading scheme," said Verheugen.

"We cannot achieve climate protection against the industry, only with it," he said.

Verheugen said that he would present an action plan for a sustainable industrial policy at the beginning of 2008. This could include an extension of the eco-design directive, under which manufactures whose products achieved top eco-standards are rewarded through public procurement advantages or tax incentives.

The commissioner stressed the importance of global sectoral agreements where representatives of industry worldwide agree to "ambitious" measures on emissions reductions and energy efficiency.

Daniel Cloquet, director for industrial policy at BusinessEurope, the employers’ federation, was positive about sectoral agreements, saying that there could be rewards for those which reduced emissions and improved energy efficiency. But he warned against trying to bring importers into the ETS, saying that it was "risky idea".

"A substantial body of members are not at all at ease with this. They want the Commission to demonstrate that it’s compatible with the World Trade Organization and that it won’t lead to retaliatory measures from our trading partners," he said.

Luxembourg Green MEP Claude Turmes welcomed the broad thrust of Verheugen’s speech. "Industrial policy is green policy with resource efficiency and a high share of renewables," he said.

But Thurmes warned against allowing energy-intensive industries avoid the costs of the ETS in return for only agreeing to meet benchmarks which industry would try to set at very low levels.

The MEP added that Verheugen had realised that if he tried to position himself as "anti-environment line he would lose control of important dossiers" affecting industry and business.

A spokesman for Verheugen said: "Including imported products from third countries where there are no environmental restrictions in the emissions trading scheme is one of the options we are looking at in ensuring a level playing field."

Günter Verheugen, the European enterprise and industry commissioner, has said that foreign manufacturers should have to join the EU’s emissions trading scheme (ETS) unless Europe’s industries are compensated for the cost of measures to tackle climate change.