How to tier and where to tier? Key ETS reform questions that need answering

In designing the new emissions trading scheme (ETS IV), it is important to build a system that will help the environment and drive emission reductions. At the same time, the system must stay close to economic and technological reality to let European industry continue to grow and provide jobs. For me, it is obvious that not all industry is in the same situation. The risk of carbon leakage varies greatly between different sectors. This is a fact acknowledged by the European Commission in its impact assessment. Furthermore, it is equally a fact that there are sectors with unavoidable process emissions. In our sector, for example, two thirds of emissions during production of ammonia are technically impossible to reduce because they are an integral part of the chemical process. The fundamental laws of chemistry cannot be altered.

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[Originally published in 2016 May issue of The Parliament Magazine]