Our industry is characterized by investments that long for decades. The amendment to the ETS directive needs to preserve regulatory stability. The 2018 ETS review already introduced substantial changes that still need to be implemented. Retroactive rules must be avoided. This would undermine the system as a whole.
The competitiveness of European industry must be secured, and carbon leakage avoided. Avoiding carbon leakage must be taken into regard when the emission caps are set for the ETS sector and the non-ETS sectors respectively. Part of the emissions from the non ETS sectors will be included in the ETS trough electrification of road transport and heating, which also needs to be considered.
Measures to avoid carbon leakage must be strengthened, also for the sectors that will not be included in a Carbon Border Adjustment Mechanism. We would encourage the Commission to explore the possibility to harmonize the system for compensation of indirect effects. As of now the system benefits members states which have yet to transform their power sector. Member states which have already shifted from coal and gas lacks the necessary funds to compensate with. The present system effectively punishes member states which have taken a greater share of the burden. A harmonization would rectify this.
