China and EU may develop sectoral carbon crediting scheme

Some innovative thinking which might help reduce emissions worldwide. Lets see to what extent the European steel makers will grasp the opportunity.

SBB 7 June The Chinese and European steel industries could develop a joint pilot scheme for sectoral carbon crediting, Peter Zapfel at the European Commission Environment Directorate-General tells Steel Business Briefing. As Europe’s steel industry claims to be under threat from carbon leakage it is an obvious choice, he added.

The Commission hopes the UN Clean Development Mechanism (CDM) can be reformed to award carbon credits (CERs) on a sector-wide, rather than a project-by-project basis, Zapfel said.

Currently CERs, funded by developed countries, are granted for any approved reduction in emissions in developing countries. A sectoral crediting system would mean credits would be awarded when emissions fall below a set benchmark, and that the reduction to the benchmark would be funded by the host nation or industry, Zapfel explains. It is unclear at this stage to whom the credits would be awarded in developing countries.

The Commission has suggested having bilateral pilot schemes with advanced developing economies to bolster their position. Zapfel did not say when official proposals may be made and EU member states would have to be consulted first. However, SBB notes that sectoral crediting will be on the agenda at the UN Climate Change Conference in Cancun, Mexico in November.

Eurofer which represents the EU mills has not yet been officially consulted and its position is still uncertain, its spokesman Axel Eggert tells SBB. There are too many unanswered questions and Eurofer could only agree to such a proposal once it was convinced that such a scheme would not hurt the competitiveness of the European steel industry and ensure a ‘level playing field’ in the international steel market, he added.


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