EUROFER position benchmarking system for steel industry
EUROFER position benchmarking system for steel industry. EUROFER proposes a system for free allocation which relies primarily on benchmarks and is designed to maximize the carbon efficiency whilst minimizing carbon leakage risk. This system proposes to apply benchmarking alternatives for the allocation of free allowances to activities characterized by a wide range of products and processes but with a relatively small share of emissions. Any benchmark system consists of four layers, namely the fundamental rules, the technical definition of the benchmarks, the identification of the benchmark values and the allocation methodology. The following description of the EUROFER system follows this systematic. 1. Fundamental rules The Emissions Trading Directive 2009/29/EC provide directly and indirectly formulated general criteria for benchmarks. The ones most relevant for the steel industry stipulate that benchmarks must act against carbon leakage, must incentivized and promote reduction of GHG emissions, avoid undue competition distortion between on site and outsourced installations, take into account unavoidable waste gas and be defined as Community wide rules. The EUROFER benchmarking model is designed to comply with all these criteria. 2. Technical definition of the benchmarks A description of each benchmark includes the following elements: Reference product, system boundaries, relevant carbon bearing flows, calculation scheme, rules for benchmark construction. 3. Identification of the benchmark values Benchmarks must provide for CO2 reduction as well as against carbon leakage. A technologically feasible benchmark is of utmost importance ahead of the Copenhagen negotiations. 4. Allocation methodology for benchmarks There are two alternatives for the reference production. Apply a rolling reference period or the use of 2005, 2006 and 2007 as reference years. For the production reference, allow for corrections in case of long period impairment of production for long term maintenance stops. Options include the general possibility to remove one of the three reference years.
