Is the cement industry undermining the Emissions Trading System?
Research by UK-based non-profit InfluenceMap has found that, despite the European cement industry seeming to embrace the Paris Agreement on climate change, many companies within the sector continue to oppose ambitious science-based climate policy.
The InfluenceMap study has found that the cement industry, which accounts for around 5% of the world's total greenhouse gas emissions, appears to be shaping the EU's Emissions Trading System (EU ETS) - the world's biggest scheme for trading greenhouse gas emissions allowances - to suit its existing carbon-intensive industrial practices through intense policy lobbying in Brussels.
This is despite recent claims from the European Cement Association based in Brussels (CEMBUREAU) that the industry "is fully in line with the goal to keep temperature rises to below 2C”.
InfluenceMap’s executive director Dylan Tanner said: "It is not surprising the cement sector is choosing to weaken the climate policies that pose an existential threat to its existence. However, they end up undermining the ambition of the whole regulatory process and we think investors should be concerned about the correlation between negative lobbying and companies’ unwillingness to transition."
InfluenceMap claims that the cement industry's profits would collapse if a low price on carbon was effectively implemented through the EU ETS. Separate research carried out by the group into corporate engagement with climate policy shows that, out of 15 industrial sectors, cement is the 'most negatively engaged', apart from oil and gas
The contrasting viewpoints of InfluenceMap and CEMBUREAU were debated at an event hosted by scrutiny organisation Carbon Market Watch on 30 November in Brussels.
Commenting on the InfluenceMap report, Carbon Market Watch senior EU policy officer Agnes Brandt said: “Thanks to the overgenerous free allocation of pollution permits, the cement sector has made five billion euros in windfall profits from the EU ETS. So it’s no wonder that they are lobbying hard to block any meaningful reform.
"When high-carbon industry gets a free pass to pollute, low-carbon technologies cannot get a foothold in the market. Policymakers must ensure that cement companies pay for their pollution to unlock the huge potential for emission cuts in this sector.”
Earlier this year, 12 of the largest cement firms were called upon to step up low-carbon innovation the sector by global disclosure group CDP. The organisation warned that “significant innovation” will be necessary in order to drive efficiency beyond current standards, in light of the upcoming expiration of industry targets.