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President Barroso President of the European Commission 1049 Brussels, Belgium
Brussels, 19 October 2010
Subject:
Inter-service consultation Commission Decision on determining transitional union-wide rules for harmonised free allocation pursuant to Article 10a of Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community (EU Emissions Trading Scheme)
Dear President Barroso We refer to our letter of 22 September 2010. In that letter we brought your attention to the extremely low benchmarks, especially for nitric acid, proposed by DG CLIMA in the interservice consultation. The guiding purpose of setting benchmarks on which free emission rights of energy intensive industries would be based was to avoid carbon leakage. The proposed benchmarks for our industry will fail this objective. The benchmark for nitric-acid is particularly low due to the inclusion of plants using a technology called NSCR to derive “the average performance of the 10% most efficient installations”. We attached a legal opinion by Noerr LLP against using NSCR technology as a reference in benchmark setting in our original letter. We forward this once more. We would also like to bring your attention to the attached summary report from an independent third party consultant Integer Research Ltd. The attached report illustrates the dramatic consequences for the European fertilizer industry and the considerable carbon leakage that would arise as a result of this extremely low benchmark. Ammonium Nitrate (AN) fertilizers are the most commonly applied fertilizers in Europe. The nitric-acid benchmark, in combination with the already extremely low benchmark for ammonia, which are part of the (AN) manufacturing process, will result in a cost to industry which could lead to around half the industry closing.
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According to the Commission’s own findings manufacturing of nitrogen fertilizers is more exposed to carbon leakage than any other industry sector. The benchmarks values we propose and also recommended by the consultants tasked by DG CLIMA (ECOFYS) will deliver 75% CO2 reductions. We believe this to be more than any other sector. This is the only way to prevent carbon leakage. We ask you Mr. President to take this matter for your serious consideration. Sincerely yours
Mr Renso Zweirs
Mr Tor Holba
Mr Esa Härmälä
President
Deputy President
Director General
On behalf of the undersigned Richard Brabec, CEO, LOVOCHEMIE Paul Thompson, CEO, GROWHOW UK Limited Hubert Puchner, Managing Director, BOREALIS AGROLINZ MELAMINE Phillipe Rombaut, CEO, AGROPOLYCHIM Francis Raatz, Président, Directeur Général, Chairman & CEO, GPN Fuat Kalgay, CEO, AZOMURES S.A Vasil Grancharov, CEO, NEOCHIM PLC Paweł Jarczewski, President of the Management Board, ZAKLADY AZOTOWE "PULAWY" Remigiusz Paszkiewicz, CEO, ANWIL Francisco De La Riva, President And CEO, FERTIBERIA S.A. István Blazsek, General Manager, NITROGÉNMŰVEK VEGYIPARI ZRT Constanti Neagoe, Deputy General Director, DONAU CHEM-SRL Arūnas Laurinaitis, Vice-President, JSC CONCERN "ACHEMA GROUP Robert Märkl, Senior Vice President, BASF AG cc:
Vice President Tajani, Commissioner Hedegaard,
Fertilizers Europe Avenue E. Van Nieuwenhuyse 4-6 Tel. +32 2 675 3550 Fax
+ 32 2 675 3961
No enterprise BE 0894.132.637 e-mail : main@efma.be
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