Update of benchmark values for the years 2021 – 2025 of ...

1 1 Update of benchmark values for the years 2021 2025 of phase 4 of the EU ETS benchmark curves and key parameters Updated final version issued on 12 October 2021 2 benchmark Preliminary free allocation 2021 (Attributed) GHG emissions covered by benchmark in 2016/2017 (average) Page Refinery products 74 689 001 114 809 016 8 Coke 7 722 487 10 162 295 9 Sintered ore 14 393 515 23 154 801 10 Hot metal 110 024 564 128 889 587 11 EAF carbon steel 2 050 637 9 804 572 12 EAF high alloy steel 2 185 759 8 681 596 13 Iron casting 930 583 1 380 242 14 Pre-bake anode 612 390 825 070 15 [Primary] Aluminium 6 130 853 6 973 626 16 Grey cement clinker 90 105 535 105 321 006 17 White cement clinker 2 145 323 2 646 157 18 Lime 15 062 292 21 751 588 19 Dolime 1 265 828 1 794 640 20 Sintered dolime 722 297 790 184 21 Float glass 4 066 932 5 129 544 22 Bottles and jars of colourless 2 265 406 3 582 195 23 Bottles and jars of coloured glass 2 519 439 3 771 180 24 Continuous filament glass fibre 283 967 390 741 25 Facing bricks 452 784 681 443 26 Pavers 160 430 207 165 27 Roof tiles 735 846 1 109 511 28 Spray dried powder 1 323 716 1 712 944 29 Mineral wool 1 577 648 3 187 683 30 Plaster 36 673 47 230 31 Dried secondary gypsum 50 229 78 682 32

2 Plasterboard 253 159 1 131 799 33 Short fibre kraft pulp 416 663 927 669 34 Long fibre kraft pulp 360 057 967 436 35 Sulphite pulp, thermo-mechanical 19 633 249 991 36 Recovered paper pulp 1 065 261 621 837 37 Newsprint 1 309 487 1 017 364 38 Uncoated fine paper 3 151 681 2 485 893 39 Coated fine paper 3 409 004 3 244 348 40 Tissue 1 517 281 2 167 734 41 Testliner and fluting 3 880 504 4 641 400 42 Uncoated carton board 792 054 874 778 43 Coated carton board 1 911 301 1 341 063 44 Carbon black 1 394 408 1 824 820 45 Nitric acid 4 614 965 4 297 166 46 Adipic acid 1 468 379 857 227 47 Ammonia 23 958 607 30 588 525 48 Steam cracking 22 816 634 31 393 609 49 Aromatics 1 139 604 1 896 871 50 Styrene 1 655 811 2 676 322 51 Phenol/ acetone 812 138 1 200

3 943 52 Ethylenoxid / Ethylenglykol 839 637 1 484 310 53 Vinylchlorid-Monomer (VCM) 758 335 1 639 059 54 S-PVC 216 193 400 288 55 E-PVC 61 707 96 197 56 Hydrogen 5 074 480 7 051 720 57 Synthesis gas 317 371 357 368 58 Soda ash 5 497 992 7 218 816 59 Heat benchmark 79 883 758 212 553 983 60 Fuel benchmark 36 183 747 58 812 970 61 Process emissions 18 288 675 19 523 842 62 3 Introduction The EU Emissions Trading System (EU ETS) is the EU s key instrument to effectively and efficiently reduce greenhouse gas (GHG) emissions from industry and the power sector. The EU ETS started operating in 2005 and operates in all EU countries plus Iceland, Liechtenstein and Norway.

4 It is a cap-and-trade system that limits emissions from more than 11,000 energy-intensive installations (power stations & industrial plants) and around 500 airlines. A cap is set on the total amount of certain GHGs that can be emitted by installations covered by the sy stem. The cap is reduced over time so that total emissions fall. Within the cap, companies receive or buy emission allowances which they can trade with one another as needed. Since 2005, emissions from stationary sources (power and industry) have declined by around 35% until 2019. To mitigate the risk of carbon leakage, industrial installations receive a significant part of the allowances needed to cover their emissions for free.

5 Since the start of phase 3 of the EU ETS (2013-2020), free allocation has been based on benchmarks, which constitute an important element of the allocation formula. Benchmarks are expressed as GHG emission intensity (tonnes of GHG emitted per tonne of product produced) and should represent the performance of the 10% best installations covered by the EU ETS producing the product. The use of benchmarks to determine free allocation has the advantage that all installations receive the same number of free allowance per tonne of product produced. In principle, efficient installations do not need to buy allowances whereas installations emitting above benchmark level need to purchase additional allowances to cover their emissions.

6 This incentivises cost-effective emissions reductions. In 2011, the Commission adopted a Decision on free allocation rules1 that also established 54 benchmarks. In addition to 52 product benchmarks (output-based), two benchmarks for heat and fuel consumption (input-based) were introduced as fall-back for products and processes not covered by the product benchmarks. Besides, process emissions accounting for about 1% of the industrial ETS emissions are allocated based on historical emissions, where installations receive 97% free allocation of the historical process emissions. The 2011 Decision on free allocation rules was based on the one product one benchmark principle as explained in its recital 5 (.)

7 No differentiation was made on the basis of geography or on the basis of technologies, raw materials or fuels used, so as not to distort comparative advantages in carbon efficiency across the Union economy, and to enhance harmonisation of the transitional free allocation of emission allowances. ). It therefore implemented the requirements of Article 10a(1) of Directive 2003/87/EC2 ( .., by taking into account of the most efficient techniques, substitutes, alternative production processes, high efficiency co-generation, efficient recovery of waste gases, use of biomass and capture and storage of CO2 .. ). Concretely, all sub-installations producing a product covered by the definition of a product benchmark are assigned to that product benchmark , without any differentiation based on technologies applied or fuels/materials used.

8 For phase 3, the collection of benchmark data was organised by European industry associations on a voluntary basis to determine benchmark curves (data points on GHG intensity per installation), based on a methodology set by the Commission through a guidance paper. On that basis, the Commission determined the benchmark value as the average of the 10% most efficient installations. 43 benchmarks were based on data collected on installations emissions intensities in 2007/2008, of which 14 covered only single-product installations to facilitate the data collection (no need to assign emissions to different products and processes). For these 43 benchmarks, the use of benchmark curves based on data delivered by the respective European industry associations allowed the determination of the average performance of the 10% most efficient installations.

9 Furthermore, 7 benchmarks were based on literature information on specific GHG emissions or energy consumption (due to a lack of data or to the lack of data compliant with the ETS benchmarking methodology ). 1 Commission Decision 2011/278/EU of 27 April 2011 determining transitional Union-wide rules for harmonised free allocation of emission allowances pursuant to Article 10a of Directive 2003/87/EU of the European Parliament and of the Council. 2 Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC.

10 OJ L 275, , p. 32. 4 This concerned some product benchmarks in the pulp/paper and steel sectors as well as the heat and fuel benchmarks which are applied across sectors. For these benchmarks, literature information was used to determine energy consumption and waste gas production which were then converted into emission values by using default emission factors, with the aim to estimate the installations emissions intensities at a level representing the average performance of the 10% most efficient installations in 2007/2008. For the heat and fuel benchmarks, these estimates have been based on the use of natural gas as reference fuel and a boiler efficiency of 90% for the heat benchmark .