1. Edit the text with your own short phrases. To change the sample image, select the picture and delete it. Now click the Pictures icon in the placeholder to insert your own image. The animation is already done for you; just copy and paste the slide into your existing presentation. EUROPEAN PARLIAMENT CERAMICS FORUM Post 2020 EU ETS Dr Laura Cohen, Chief Executive, British Ceramic Confederation 3 December 2014

2. The EU ETS and the ceramic industry More than 1,200 ceramic installations ‒representing around 10% of total number of installations Less than Mt 14 in 2013 ‒less than 1% of emissions Around 80% of installations are “small” (<25 ktonnes) Energy intensive sector with long investment cycles Ceramic Industry Roadmap

3. Post 2020 EU ETS The system is at another crossroads A new balance needs to be defined: Variables of the equation: security, sustainability, affordability Known elements: ‒Ambitious 2030 decarbonisation target overall  -40% by 2030; -20% by 2020 vs. 1990  More challenging for ETS sectors: -43% in 2030 vs. 2005; -21% in 2020 vs 2005 ‒Steeper decarbonisation path (Cap: -2.2% annual linear factor vs. 1.74%) ‒Increasing prices for carbon and energy ‒Possible Market Stability Reserve ‒Continuation of carbon leakage measures BUT  Which sectors?  What level of protection?  For how long?

4. Post 2020 carbon leakage If the ceramic industry is excluded from the post 2020 carbon leakage provisions, it will have to purchase on average 90% of the allowances by 2030 (more than € 4bn*) *assuming €30 / tonne and production rate increase at 1% / year

5. Our policy recommendations for post 2020 ETS Predictable and stable legal framework No change to pre 2020 framework Carbon leakage protection proportionate to the level of ambition ‒Remove cross sectoral correction factor ‒Compensation for indirect costs Address technical and economic feasibility Address complexity of partial cessation and capacity change rules – e.g. support major investment Consider international context – protection while no equivalent commitments Market Stability Reserve has to be taken in context of holistic structural reform More focus on untapped potential in non-ETS sectors like buildings

6. Edit the text with your own short phrases. To change the sample image, select the picture and delete it. Now click the Pictures icon in the placeholder to insert your own image. The animation is already done for you; just copy and paste the slide into your existing presentation. Thank you for your attention!