8 TRADE ASSOCIATIONS POSITIONS ON CLIMATE CHANGE

Source: Influence Map

EU trade associations representing energy and industrial interests have long been powerful stakeholders in the European climate policy process. The majority of industry associations actively lobbying on EU climate policy continue to oppose increasing regulatory ambition on climate change. The 8 trade associations here below have the largest negative impact on climate policy.

There is persistent negative lobbying on ambitious climate policy across the majority of industry groups analyzed since 2015. This lobbying has focused on the review process for the EU’s climate policy framework up to 2030 which occurred between 2015-2018.

Auto trade group ACEA is found to have been the most oppositional over this period, owing to an aggressive campaign against efforts to establish ambitious CO2 standards under the EU Clean Mobility Package between 2017- 2019. It is also the only group surveyed to show increasing opposition to ambitious climate policy since 2015.

Lobbying by energy intensive industry associations covering the cement, chemicals, metals, steel, refining sectors, as well as cross-sector group BusinessEurope, around the EU’s Emission Trading Scheme was also found to be overwhelmingly negative from the perspective of European emission reductions. Heavy Industry GHG emissions covered by the EU ETS have reduced just 1% since 2012. The result of EU industry group lobbying between 2015-2018 is a new set of EU ETS’s rules that, 2018 analysis by Carbon Market Watch has shown, ensures industries representing 90% of total EU industry emissions continue to receive their emission permits for free after 2020. This will reduce the incentive to decarbonize for longer.

Eurelectric is an exception to this trend and is now engaging in a largely positive manner across the range of EU climate and energy policies. This represents a significant transformation in the group’s lobbying stances over the past three to five years. Eurelectric has broadly supported reforms of the EU ETS, and in 2018 lobbied for higher CO2 emission standards for vehicles and zero- and low-emission vehicle sales targets. Since 2014 the group’s positioning on renewable energy policy has moved from not supporting renewable energy targets, to in 2018-2019 accepting the deal on a raised EU 2030 target and cautiously advocating for increased measures at the member state level to meet this ambition. Eurelectric appears positive on decarbonizing by 2050, although it has not specifically supported economy-wide net-zero target for 2050. However, the group has committed the utility sector to become carbon neutral “well before 2050.” The group’s strategic support for electrification as a route to decarbonise transport, heating and industry suggests it could be a powerful, business-driven advocate for climate policy going forward, corralling other groups towards this goal.

The analysis shows that a number of trade groups found to be highly oppositional in 2015 have more recently made incremental improvements in their climate positions. In particular, responses to the Commission’s long-term strategy by groups including BusinessEurope or chemical sector representative CEFIC indicate some shift towards moderately positive positions on climate ambition. More broadly, the trade groups representing sectors including refining, steel, metals and cement have tended to engage with the process via low carbon pathway reports, setting out potential GHG emission reduction contributions from their respective sectors and stressing the need for technology driven solutions that are supported by non-binding policy initiatives. However, none of the group analyzed has explicitly stated support for a net-zero emissions target time-bound to 2050 at the latest. Instead, a trend of increasingly subtle and sophisticated lobbying around the long-term strategy is noticeable. This is characterized by apparently positive top line statements which are, however, attached to conditions or warnings of the economic consequences of higher ambition. For example, trade groups representing energy intensive sectors including CEFIC (chemicals), CEMBUREAU (cement), Eurofer (steel) and Eurometaux (metals) have emphasized the economic risks from a net-zero ambition, whilst seemingly conditioning their support on increased protection be granted to their sectors if a route of higher ambition is chosen. InfluenceMap’s analysis highlights such arguments as a commonly used tactic, deployed effectively by trade groups worldwide, to delay or weaken the implementation of stringent climate regulation. This behaviour by trade groups contrasts with increasing recognition and support for meaningful climate regulation in the corporate sector and highlights the growing misalignment between companies and their trade groups on climate. For example, in April 2019 more than fifty EU corporations including Unilever, IKEA and Iberdrola have explicitly called for EU climate neutrality by 2050. Many of the groups analyzed have a more negative lobbying position than the average position held by their corporate membership: with BusinessEurope and ACEA most severely misaligned.

1. The European Automobile Manufacturers Association (ACEA): AECA is actively and negatively lobbying on EU automotive climate policy. In response to the European Commission’s request for comments on the EU’s 2050 Climate Strategy in 2018, ACEA does not appear to have supported an ambitious transition towards low-carbon mobility, alternatively stressing that ‘cost-effectiveness’, not overall emission reductions, should be the overriding principle of a future policy response, and urging the Commission to avoid 'burdening the sector'. In 2015-18, ACEA strongly lobbied against efforts to establish ambitious CO2 emissions standards for the automotive sector for 2021-2030 and strongly opposed the level of stringency set by EU regulators in 2018 & 2019 for light-duty and heavy-duty vehicles, respectively. In 2019, ACEA secretary general Erik Jonnaert suggested that a review of CO2 targets in 2023 should be used to lower the targets (rather than increase their ambition) if necessary. ACEA has stated support for a 'technology neutral' approach to transitioning the automotive sector towards low-carbon. In response to the establishment of higher CO2 standards by EU regulators in 2018-19, ACEA has called to European countries to ramp up measures to incentivize LEV and ZEVs, including the construction of infrastructure to accommodate this process. However, in 2017 ACEA opposed binding EV sales mandates and in 2018 continued to advocate against what it sees as a “forced push” towards ZEVs. In its response to the EU 2050’s climate strategy, ACEA argued that while electric and hydrogen might be long-term solutions, internal combustion engine (ICE) vehicles will remain dominant in the next decade due to the cost of alternatives.

2. BusinessEurope: BusinessEurope has predominately opposed EU climate policy ambition since 2015. The group communicates support for global action on climate change, for example advocating strongly in favour of finalizing the Paris Agreement’s ‘rule book’ in 2018. However, its stated position on COP24 2018 suggests it does not support raising the ambition of the EU climate policy unless further action is taken by other economies. In September 2018, a leaked internal memo from BusinessEurope laid out a proposal for continued opposition to an increased ambition for the 2030 EU climate policy framework. Despite this, a 2019 position paper on the EU's climate strategy states support for longterm EU ambition towards 'net-zero emissions' depending on a number of conditions being met, although not giving a specific date for which BusinessEurope believes this should be achieved. Since 2015, BusinessEurope has actively lobbied against ambitious reforms to the European Emission Trading Scheme and has lobbied the ongoing allocation of free emission permits to industry. In 2019, BusinessEurope confirmed that this is its preferred measure for safeguarding industry competitiveness, although has also discussed the possibility of further options including border carbon adjustment mechanisms. BusinessEurope opposed any increase in the ambition of EU 2030 energy efficiency targets in 2016, and in 2018 opposed proposals to set a binding target of 35%. The group also wrote to the European Commission advocating that these targets remain indicative instead of binding. BusinessEurope does not appear to support ambitious policy to accelerate renewable energy, advocating for subsidies to be phased out to ensure a “market-based” approach wherein all energy sources are on “equal footing”. In 2017, BusinessEurope argued that proposed emission standards to disqualify coal power plants competing in capacity mechanisms potentially represented a shift away from its preferred market-based approach, and stressed concerns around the potential impacts of such a shift. Despite this, in 201 9 BusinessEurope has communicated support for a number of other, broad measures to incentivize low carbon technology uptake in sectors including buildings, transport and industry.

3. CEFIC (Chemicals): CEFIC has opposed stringent EU climate regulation, although has evolved its position on certain climate policy issues since 2015. The group has increasingly stressed the role its sector might play in a long-term transition towards carbon neutrality and has advocated for measures including financing mechanisms and infrastructure projects to help deliver long-term decarbonisation for EU industry. However, CEFIC has not clearly specified the date for which it supports carbon neutrality at the EU level and continues to stress concerns regarding rising energy and regulatory costs undermining industrial competitiveness. In response to the release of the EU Commission’s 2050 GHG emission reduction strategy, CEFIC stated: “make us competitive and we will deliver.” However, in a joint position paper with EU Energy-Intensive industry bodies in January 2019, CEFIC emphasized the risks posed by efforts to reach net-zero by 2050 as a concern. CEFIC also appears opposed to any short term increase in EU 2030 climate targets, pushing in 2018 for “stable objectives” instead of proposals to increase the 2030 GHG emission target or EU ETS objective. Despite recognising the 'political need' to change the EU emissions trading system, CEFIC has focused its lobbying on securing maximum free emission permits for its sector. In 2017, CEFIC supported energy efficiency policy for the building sector, but opposed binding energy efficiency obligations for industry, calling them a “de facto cap for growth”. In consultation with the EU Commission in February 2016, CEFIC opposed an EU renewables target, called for the immediate phase-out of subsidies and asked policymakers to limit renewable policy ambition ‘to reduce the burden’ of energy and climate polices. Since then, however, CEFIC has also advocated for the greater use of Power Purchase Agreements (PPAs) as an alternative route to facilitate increased renewables.

4. CEMBUREAU (Cement): CEMBUREAU is negatively positioned with respect to EU climate policy ambition. Whilst claiming to share the vision for a carbon neutral Europe, the organisation does not specify a timeframe in which it supports this transition and further advocates this only on the condition that it is accompanied by a “clean planet” - the implication being that the pursuit of greater climate policy ambition in Europe should be stalled until global climate regulation is realised. CEMBUREAU argues that, in the absence of comparable regulation in other parts of the world, European industry should be compensated for the costs of climate regulations and receive full carbon leakage protection. CEMBUREAU has, since its original implementation in 2000 - 2005, consistently lobbied to weaken the European Emissions Trading System. In 2016-2018, CEMBUREAU continued to lobby EU policymakers, stressing the threat to international competition to oppose measures to reform the scheme and progressively reduce the allocation of free emission permits to energy-intensive industry. Whilst CEMBUREAU supported the implementation of the Energy Performance of Buildings Directive in 2018, the organisation has opposed energy efficiency policy directly related to cement sector operations, stating that such policies are not compatible with economic growth and should be implemented at a substantially reduced rate. CEMBUREAU has criticized the renewable energy directive for not offering enough protection to the cement sector, instead of arguing for “market-based funding” for renewable energy production instead of binding legislation. More broadly, the organisation does not appear to support urgent action to transition the European energy mix, instead supporting policy that ensures “equal treatment of all generation technologies”. Despite this, CEMBUREAU has shown support for the increasing use of alternative fuels, such as biomass, and has offered support for certain financing mechanisms and infrastructure projects to support the development of low-carbon products.

5. Eurelectric: Eurelectric is actively lobbying on EU energy and climate change policy and has become more positive on a number of regulatory strands since 2015. In 2018, Eurelectric positively engaged with regards to EU Commission's long-term strategy on GHG emission reductions and has published a series of reports supporting increased electrification of sectors including transport, heating and industry to aid the decarbonisation of the EU economy. The group has also actively lobbied in favour of the EU Parliament proposals to increase the ambition of EU CO2 emission standards for vehicles, as well as zero- and low-emission vehicle sales targets. In 2016-2017, Eurelectric supported efforts to increase the effectiveness of the EU Emissions trading system and in 2018 suggested it would have supported a more ambitious set of reforms to strengthen the scheme. However, Eurelectric also lobbied in favour of increasing free ETS emission permits for utility companies in certain member states and has opposed national-level measures to raise the carbon price. In 2017, Eurelectric opposed an increased EU 2030 30% energy efficiency target and, despite broadly accepting the agreed 32% renewable energy target in 2018, had only backed a target of 'at least 27%'. However, the organisation appears to have become more positive on certain strands of renewable policy and in 2018 has advocated for measures to encourage corporate renewable usage, e.g. through Power Purchase Agreements. Despite this, Eurelectric opposed a 550g CO2 emissions limits for power plants in the EU capacity market in 2017, essentially supporting measures which may extend coal power’s role in Europe until the 2040s, despite also committing to not opening any new coal plants in 26 EU countries

6. European Steel Association (Eurofer): The European Steel Association (Eurofer) is lobbying EU climate change policy with mixed and mostly negative positions. EUROFER has stated that the EU’s long-term strategy is a “high-risk operation” on the grounds that it threatens the competitiveness of EU industry. As such, it has stressed the need for regulation from non-EU countries. EUROFER has criticized the EU ETS for not securing a “global level playing field”. Between 2015-17, the group lobbied against ambitious EU ETS reforms, for example, organising a letter from the steel industry in 2017 opposing measures including the reduction of free emissions allowances. Eurofer has also opposed reforms such as the cross-sector correction factor and the market stability reserve. Whilst EUROFER has voiced support for EU rules on car and van emissions, it appears unsupportive of EU energy efficiency standards or targets for industry, suggesting they are incompatible with economic growth. While Eurofer’s communications in 2018-19 have indicated growing support for transitioning to a low-carbon economy, the organisation has also advocated against renewable energy subsidies, stressing the need for “market-based” measures to support renewable energy over binding government regulation.

7. Eurometaux (Metals): EUROMETAUX appears to have a mostly negative position on climate and energy policy. EUROMETAUX has welcomed the Paris Agreement and certain industrial solutions for reaching carbon neutrality in Europe. However, the organisation has not specified the timelines it supports to achieve this target and, in consultation with the EU Commission in 2018, instead stressed that a low-carbon economy a “high risk operation”. In a position paper, submitted with other heavy-industry lobby groups, Eurometaux has emphasized concerns regarding the EU’s ambition of net zero GHG emissions by 2050, arguing industrial competitiveness must be protected. EUROMETAUX has advocated for policy makers to weaken the EU ETS by giving energy-intensive industries full carbon leakage protection. In 2017, EUROMETAUX suggested they supported energy efficiency regulation for the building and transport sectors, however, called for their own industry to be exempt from other energy efficiency regulation. In 2018, EUROMETAUX suggested current energy efficiency ambitions were incompatible with economic growth. EUROMETAUX has stated that “decarbonising Europe’s electricity supply" will be key to enabling the transition and has supported measures to incentivize electrification. EUROMETAUX has also advocated that the transition of the energy mix be driven by market-based responses rather than government regulation and has argued that subsidies for renewable energy should be temporary and technology-neutral.

8. FuelsEurope (Oil and Gas): FuelsEurope is negatively lobbying EU climate change policy. Despite stating support for the Paris Agreement in 2015, FuelsEurope has stressed carbon leakage concerns to warn against EU climate ambition. In a 2018 consultation with the European Commission on increasing the EU’s contribution to global GHG emission reductions, FuelsEurope argued that Europe should not focus on “ever-higher unilateral targets”. While appearing to support the EU ETS as an alternative to other climate policies, FuelsEurope has not supported reforms to raise its ambition from the perspective European emission reductions. In 2018, the group also continued to advocate for compensation for the refinery sector for costs related to the scheme. FuelsEurope has communicated opposition to binding energy targets, including EU energy efficiency targets and has supported a transport exemption from the EU energy efficiency obligation scheme. FuelsEurope previously opposed EU renewable energy legislation, advocating against both the binding 27% EU 2030 renewable energy target and renewable subsidies in 2014-16 consultation responses. While in 2017 the organisation appeared to become more accepting of an EU-wide renewable energy target of 27% , including promoting a role for renewable fuels in achieving it, FuelsEurope did not appear to specify a position on proposals to raise this target and argued that any target should be realistic and flexible. FuelsEurope was critical of increasing EU vehicle GHG emission standards between 2016-2018 arguing that this “risks misleading the car industry into premature electrification ” and neglects the “potential for further efficiency improvements in conventional vehicles”. FuelsEurope has proposed policies to help support increased use of low-carbon fuels, although appears to have opposed policy specifically promoting transport electrification. CEO John Cooper has criticized electric vehicles as “a route to much more expensive fuels in transport.” In 2017, FuelsEurope directly engaged the EU Commission in to oppose a proposal for zero-carbon vehicle sales mandates, as well as EV subsidies.