Mr. President: The main element of the Commission’s current proposals is the revision of the ETS system. You recognise the problem that you call “carbon leakage”, and I call “driving energy-intensive industries offshore”. And you have decided to give these industries free allowances to redress the balance.
But you have created your own Catch 22. If you give them enough allowances to stay competitive, you have no hope of achieving your emissions targets. But to achieve your emissions targets, you can’t give them enough allowances.
You face a stark choice between competitiveness and emissions targets: you cannot have both.
You have also created a structure which involves perpetual market intervention and distortion, and creates a field day for lobbyists and lawyers, as industries fight each other for an ever-decreasing pot of free allowances.
The proposal to offer a tiered structure for different industry sectors only exacerbates the problem. And the use of the top 10% as a standard implies that 90% of EU industries will be at a competitive disadvantage anyway.
At the same time you shift the bulk of the burden onto smaller businesses — the very SMEs which we constantly promise to help.
We face competition from China with massive cheap coal-fired generation, and from the USA where Donald Trump promises to make low-cost energy the driver of the economy.