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Wood, Paper, Printing

Emissions trading and industries at risk of carbon leakage

Earth surrounded by cardboard boxes © Franck Boston -

The effects of climate change policies and the emissions trading system on some forest-based industries are important. Some of these industries, like pulp and paper or wood-based panels, are energy-intensive and will be required to make a major contribution to the mitigation of climate change. These industries must achieve excellence in terms of environmental performance as well as high energy efficiency, without losing overall competitiveness.

Such policies can stimulate innovation and send the necessary economic signals for achieving a low-carbon and sustainable economy in a cost-efficient way while providing an incentive for other countries with high emissions to set up ambitious reduction measures for 2012 onwards.

It is not in the interest of the European Union that in future production moves to countries with less strict emissions limits ("carbon leakage"), as this would have negative environmental and economic consequences.

For this reason, the Commission's climate action and renewable energy package of 23 January 2008 recognises and addresses the specific situation of energy-intensive industries. The package sets out clear criteria for identifying the energy-intensive industries exposed to the risk of carbon leakage. The Commission will determine the sectors or sub-sectors that fall within this category; they shall be allocated allowances free of charge, up to 100 percent, when the most efficient techniques have been taken into account. In this context, the Commission will assess whether forest-based industries qualify for such measures.

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