New system will cost Finnish industry an additional 5 to 10 billion euros

According to the proposal, the auctioning of emissions rights would be expanded in phases after 2013. In 2020 there would be no more unpaid emissions rights, so companies would be forced to purchase all their rights through auctions.

Competitiveness under threat

According to PTT’s calculations the biggest loser would be the forest industry. When all emissions rights are auctioned, its costs would increase by 450 to 950 million euros a year depending on the price of the emissions rights. For the technology industry the increase in one year would be 290 to 580 million euros, for the chemical industry 210 to 390 million euros and for the construction product industry 80 to 140 million euros.

PTT calculates that these kinds of additional costs would eliminate the operating profit of these sectors either in part or in total. For example, based on the figures for operating profit in 2006, some parts of the construction product industry would become clearly unprofitable. Absorbing these negative results would be paid for ultimately by eliminating jobs. 

Emissions trading creates additional costs for industry in three ways: purchasing emissions rights; increased electricity prices; and increased prices for bio-based raw materials, such as roundwood and recycled paper. The costs of the new emissions trading system will be in addition to the costs already created for industry by the present system, especially in terms of increased electricity prices.

The EU really has to relinquish the European Commission’s timetable, according to which the decisions affecting energy-intensive industry would be made only in 2010-2011. This timetable would lead to tremendous uncertainty and dissipate the investments made by industry. The sectors to be kept outside the auctioning of emissions rights should be defined without delay so that the overall situation is clear in good time before the Copenhagen climate summit, Kyla-Harakka-Ruonala adds.