Climate Action

Adoption of the Delegated Decision on the carbon leakage list for 2021-2030

15/02/2019

The Commission has adopted a Delegated Decision on the carbon leakage list for the period 2021 to 2030 (EU ETS phase 4). It will be submitted to the European Parliament and the Council for a two-month period. The carbon leakage list is an important step to determine the free allocation that industries will receive against the risk of carbon leakage in the EU ETS phase 4. The other legal acts needed to determine free allocation include the Commission Delegated Regulation on detailed rules for free emission allowances allocation (adopted on 19 December 2018), a forthcoming implementing act on updated benchmarks, an implementing act on activity level changes and the Commission Decision on National Implementation Measures (NIMs).

The adopted Delegated Decision presents the outcome of the first and second-level assessments needed to determine the carbon leakage list for 2021-2030. An Impact Assessment accompanies the Commission Decision, focusing on the operational options related to the second-level assessment framework. Following the two-month period, the Delegated Decision will be published in the Official Journal and will enter into force on the day following the publication. It will apply from 1 January 2021 onwards. The new carbon leakage list will cover the entire 10-year period of phase 4 of the EU ETS. The carbon leakage list identifies 63 sectors and sub-sectors covering about 94% of industrial emissions (98% of industrial emissions covered by the carbon leakage list 2015-2020) that have satisfied the criteria laid down in the revised EU ETS Directive.

Throughout the legislative process, the Commission held two public consultations and a number of bilateral meetings with industry and other stakeholders. Two dedicated stakeholder workshops were organised, on 2 March 2018 and 16 May 2018 respectively, and discussions took place with industry stakeholders and the Climate Change Policy Expert Group.

In contrast to the current carbon leakage list valid for 2015-2020 (EU ETS phase 3), the list for phase 4 is the result of a new assessment criterion that combines emission intensity and trade intensity, which must be above 0.2 threshold. The Commission assessed 245 industrial sectors classified under the 'Mining and quarrying' and 'Manufacturing' sections of the NACE statistical classification of economic activities.

In May 2018, the European Commission published the preliminary carbon leakage list for EU ETS phase 4. It presented the results of the first-level assessment, i.e. those sectors at NACE-4 level directly qualifying for the new carbon leakage list, and listed the sectors and sub-sectors eligible to apply for the second-level assessment based on criteria laid down in the EU ETS Directive. All second-level assessments, including quantitative disaggregated and qualitative assessments, were finalised in September 2018. The draft delegated act establishing the list of sectors and subsectors deemed at risk of carbon leakage for phase 4 of the EU ETS was published on the Better Regulation Portal for a 4-week stakeholder feedback period from 5 December 2018 until 2 January 2019.

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