Abstract

• Author: Fabien Roques - Helene Laroche
• Pages: 63-63

Final rep ort

63

Abst r a ct

ADE a nd Com pas s Lexe con ( th e Cons ort ium ) h ave been com miss ioned by th e Eur opean

Commission (EC) t o pr ov ide su pport in t he combined retr osp ect iv e evaluation an d

prospective impact assessm en t st ud y of the European Union (EU) Emission Trading

System ( ETS) St ate Aid Guidelines.

The report first pr esent s our w or k on t he ev alu at ion workstream in t he form of t hr ee

memos covering i) a lit eratur e rev iew on car bon leak ag e risk; ii) an an alysis of the

factors explaining why Mem ber States did im plem ent or not compensat ion schem es;

and iii ) a rev iew of the pub lic c onsul tat ion resp onses. Our lit erat ur e re view is consi sten t

wi th th e fin din gs o f t he EC i n 2 015 and sug gest th at to dat e, n o h ard evi den ce of car bon

leak age caused by EU ETS is observed. This situ at ion could change with t he higher

car bon price s. Ou r an alysi s also shows t hat respo nden ts ackn owled ge t he e ffect iven ess

of the EU interv ention but som e of the charact er istics of th e Guidelines are criticised.

Fina lly , o ur re por t show s t ha t pol icy con sider at ion s m ain ly dr ive Mem be r St at es’ deci sion

to im plem ent a comp ensat ion mech anism or not .

Secon dly, the r eport presen ts our results on the imp act assessment wor kstream which

covers t he eligibilit y cr it er ia, the aid intensit y, deg ressiv ity and CO2 em ission f act or

par am et er s. We show that the indir ect carb on leakage indicator is a relevant indicator

to assess elig ibility althou gh some sectors at low risk cou ld be compensated. An aid

inten sity at 75% could be en visag ed along w ith a GVA cap aft er compen satio n. For th e

deg ressiv it y parameter, our analysis is inconclusive and f or t he CO2 emission factor

par am et er , we conclude t hat am ending regional CO2 factors based on m odified

geo graphical areas seem s to be t he m ost ap prop riat e approach .

Key wor ds: indirect em ission cost s, EU ETS, com pensati on