EU’s climate policy endangers companies’ competitiveness: experts

The organisation associating Polish companies ‘Business & Science Poland’ (BSP) argues that the European Commission's proposals for climate policy raise concerns in terms of competitiveness. Its reservations are raised, among others, by a proposal to reduce the number of free emission allowances received for various sectors of the economy.

BSP, based in Brussels, represents companies from the refining, non-ferrous metals, chemical, fertiliser and air transport sectors.

The organisation passed on to Polish MEPs its position on the EU climate package “Fit for 55,” in which it pointed out the need to ensure the competitiveness of Polish and European enterprises on global markets. In the opinion of BSP members, the reform of the Emission Trading System (ETS) should not lead to a deterioration of international competitiveness. Their concerns are raised by the proposed changes to the allocation of free emission allowances.

“The goal is to reduce emissions and maintain the competitiveness of the European economy. It should be remembered that European companies will have to bear additional costs for the implementation of innovative technologies. There will be a need for additional financing. These costs are not borne by non-EU companies. This affects the competitiveness of companies,” Katarzyna Lachowicz, director of the BSP office, commented on the matter.

Part of the “Fit for 55” package is, among other things, the Carbon Border Adjustment Mechanism (CBAM). It assumes that EU importers will buy carbon certificates corresponding to the carbon price that would have been paid if the goods had been produced in accordance with EU rules.

CBAM is intended to reduce the risk of 'carbon leakage' by encouraging producers from non-EU countries to green their production processes.

According to BSP, the mechanism should not be an alternative to the existing tools of climate policy. The organisation believes that reducing the number of free emission allowances received by 10 percent over a 10-year period for CBAM sectors is a significant threat to the competitiveness of sectors in export markets.