Final rep ort
As p art of t he EC’s evaluation an d im pact assessm ent for th e rev ision of t he 2012
Guidelines, the Consortium p rovided deliver ables to supp ort the EC’s work cont ainin g
ana lysis ba sed o n in depen dent re search , publ ic sou rces, lit eratu re r evie w, respo nses t o
th e targ eted and pu blic consultation respo nses.
On th e evaluation workst ream , the Consortium provided t hree m em os to suppor t the
EC’s work on the evaluation of the previous Guidelines: i) on t he literat ure rev iew on
th e risk of car bon leakage, ii) on the fact ors explainin g why Mem ber St ates implem ent
a com pe nsat ion m ech anism or o th erw ise, an d i ii) o n t he re vie w of th e p ubl ic co nsu lt ati on
The key messag e from our literature review work is t hat there is no hard ev idence of
carbon leakage during Phase III, but t his conclu sion might dif fer under higher car bon
Respondent s to the public consu lt at ion ackn owledge the eff ect iv eness of the
int erv ention as well as the EU-add ed value bu t m ost ly co nsider th e int erv ention lim ited
in terms of t he eligibility of th e sect or s as w ell as t he level of aid r eceived. Most
respon dents p oin t ou t t he residual r isk of carbon leakage in the f orm of inv est m ent
leakag e, t hat in their view requ ires a h igher aid am ou nt by removing degr essivity ,
changing t he ef ficien cy benchmarks to less constr ain ing par am et er s as w ell as
increasin g t he aid in tensit y para met er.
Finally, our t ask on the Member States implementation showed th at t here is no clear
correlat ion bet ween m arket characteristics such as trade pat t erns or elect ricit y
consum ption and p rices, and the im plementation of compensat ion by Mem ber States.
Our an alysi s con firm s t he conclu sion s fr om th e 20 15 evalu ati on r epor t which f ound th at
policy consider at ions were the main driver s for t he implement at ion of com pensation
mechanisms by Member Stat es.
On th e im pact assessm ent work st ream , we provided 41 Sect or Fich es on t he sectors
ident if ied b y the EC as pot entially at risk of carbon leakage, analysis on th e GVA and
em issio n f acto r cal cula tion , a s we ll a s re spons es t o t he EC imp act assessm en t q uest ions
using t he r esponses t o t he t argete d and p ublic consu ltat ion responses.
Our analysis of the eligib ility criteria ind icates t hat th e ICLI appear s to be a relev ant
indicator to determine exposure t o carbon leakage risk . Below 0.2, t here is n o sect or
deemed at risk ( RAG rat in gs equal and above m edium). Out of t he twelve sect or s
deemed at risk, sev en sectors deemed at m edium risk have an I CLI between 0.2 and
0.5, an d the remaining five deem ed at mediu m -high risk have an I CLI ab ove 0 .5 .
How ever, t his m etric presents som e lim itations con sidering t hat between 0.2 an d 0.5,
th e p ictu re is m or e m ixed , w it h a possi bili ty th at comp ensat ion bas ed on t he I CLI met ri c
will over comp ensat e sect ors deem ed at low risk of carbon leak age.
Based on our Sector Fich e work an d GVA analysis, the responses t o th e targeted and
publi c consult ati on as w ell as our em issio n factor repo rt, we conclu de t he f ollow ing:
Aid int ensit y: ou r r esult s sh ow that t he m ini mum le vel of co mpe nsat ion to
bring all the sect or s deemed at risk t o th e low est level would be an aid
int ensi ty set at 75 %. Wit h an aid int ensi ty below 75% , t he risk is p art ially
reduced for four ou t of th e tw elve sect ors a t r isk.
Even w it h com pensation at 7 5% , som e sect ors bear indirect costs
representing mor e th an 0 .5% of their GVA ( and with h igher carbon prices
ev en m ore th an 1 .0% an d 1 .5% ). A co mpe nsat ion mech anism w ith an a id