IFIEC calls for adequate compensation of power price impact

In a statement released earlier this month, IFIEC (the International Federation of Industrial Energy Consumers) has indicated that additional costs to EU industry in terms of higher electricity prices resulting from the EU ETSⁱ amount to about 8.5 billion € annually. It has stated that these indirect emission costs need to be compensated to avoid carbon leakage as long as international competitors do not pay a similar carbon price.

The Federation has thus called for:

• Financial compensation for all products that are at risk of carbon leakage
• Rules on financial compensation which create certainty for planning and investment
• The non-exclusion of electricity supply contracts signed before the start of the first ETS trading period
• A level of compensation which covers the real ETS related cost burden of efficient electricity consumption
• Financial compensation which fully compensates the indirect costs of ETS
• Compensation which should be paid in the year in which the costs occur

The statement also stresses that:

• There is no justification for repayment of financial compensation in case of closure of an installation
• The policy instrument of compensating the ETS-related indirect costs should not be used to pursue other policy aims.
• The EU Commission should not build obstacles to national compensation measures before 2013
• Information concerning electricity consumption and contracts of individual installations are competition sensitive information and should therefore be treated confidentially.

CEMBUREAU supports IFIEC’s positions.

The full statement is available from here:

http://www.ifieceurope.org/docs/EU%20ETS%20power%20price%2019%2004%2010.pdf