Chief executive of leading European oil refining company has warned that a proposed European Union scheme to force companies to pay for carbon emissions permits previously handed out free could end up destroying Europe's petrochemicals and refining industry. In January the European Commission announced measures designed to cut EU emissions of CO2 by 20% of 1990 levels by 2020. One of the cornerstones was a reform of the emissions trading scheme (ETS), which allocates a free, fixed quota of emissions permits to heavy industry. The Commission has proposed that from 2013 oil refineries and airlines, and possibly other sectors, will have to pay for 20% of their emissions permits, rising to 100% by 2020. It hopes to formalise the plan by the end of the year. The EU considers the emissions trading scheme as the most important initiative in the world to tackle climate change.
The proposals would undermine the competitiveness of a struggling industry and have a cascading impact on Europe's wider economy because of the close links between the region's oil, chemicals and plastics industries, which collectively support nearly two million jobs. The plan could trigger an exodus of European jobs and investment offshore with no net reduction in global emissions.