Glass for Europe’s Answer to the Consultation on the EU 2020 Flagship on Industrial Policy

Glass for Europe’s address is rue Belliard 199 – B-1040 BrusselsGlass for Europe is the trade association for Europe’s manufacturers of flat glass.Flat glass is the material that goes into a variety of end-products and primarily in windows and façades for buildings, windscreens and windows for automotive and transport as well as glass covers, connectors and mirrors for solar-energy equipments. It is also used in smaller quantities for other applications such as furniture, appliances, electronics, etc.

Glass for Europe has four members: AGC Glass Europe, NSG-Group, Saint-Gobain Glass and Sisecam-Trakya Cam and works in association with Guardian. Altogether, these five companies represent 90% of Europe’s flat glass production.

Glass products not only provide light, comfort, style, security and safety, they are also essential to energy-efficient buildings, houses and transport. Windows containing high-performance glass such as low-e insulating glass, which helps keep warmth in, and solar-control glass, which reflects unwanted heat away, help reduce energy consumption. Solar-energy glass helps enhance the production of a renewable source of energy.

2.1. In your experience, which of the following policy-related factors are most important for the competitiveness of European business? Please select a maximum of three factors:

– Environmental regulations

– Energy & climate policies

– Other: ensuring a level-playing field for EU-based manufacturers

2.9.1. Environmental regulations: please explain the importance of the issue, giving examples and evidence

Environmental regulations for industries are a driver of innovation and are strictly complied with by the glass industry. Nevertheless, they entail significant extra costs which are not faced by third countries’ competitors and can therefore not be redirected to customers in glass prices thus seriously affecting the competitiveness of EU industries. Besides, as glass manufacturing requires high temperature for raw materials to melt into glass, significant amount of energy and CO2 emissions will always be needed. Therefore, requirements set by public authorities must take into account the physical and technological constraints face by different sectors. Requirements must be technologically feasible and economically achievable. For instance, achieving an 80% decrease in CO2 emissions as set out in the EU roadmap for a low carbon economy by 2050 seems impossible in the flat glass industry under the present circumstances.

2.9.2. Environmental regulations: how can businesses themselves better respond to these issues?

Investments in state-of-the-art environmental systems enable the glass industry to comply with some of the world’s toughest environmental regulations. Best Available Techniques are always applied when a new production line is built or existing ones are substantially refurbished. Most plants have been equipped with sound environmental management systems to improve the environmental performance of processes and products. Similarly, glass manufacturers dedicate a significant proportion of their R&D investments to process innovations to further reduce the environmental impacts of manufacturing and comply with even more stringent requirements. Besides, the recycling of pre-consumer cullet – i.e. waste and by-products generated by glass manufacturing and processing - helps the glass industry to further reduce the environmental impacts of its manufacturing installations.

2.9.3. Environmental regulations: what can policymakers do to address the issues at Member states, local or regional level?

Investments in environmental upgrades and the generalization of best available technologies are essential for industry. However, such upgrades require heavy investments and many of them can only be carried when the installation is mothballed. Member states, local and also EU authorities need to take these constraints into account and grant derogations to allow sufficient lead-time for glass manufacturers to upgrade their existing installations to best available techniques.



Industrial process innovation is also necessary to maintain the lead in R&D and should also be supported by regional and local innovation clusters.



Finally, although construction and demolition waste glass is recyclable, the overall capacity of cullet recycling remains below expectations. This is largely due to the fact that effective collection schemes are not in place across Europe thus limiting availability of quality cullet. Authorities should be incentivized to set up effective collect points.

2.9.4. Environmental regulations: what can policymakers do to address the issues at EU level?

It is essential that the EU develops a common methodology to assess the overall environmental impacts of products which allows for a proper quantification of product’s energy saving properties. For example, construction products should not be assessed solely on their embodied carbon but rather on complete LCA which take account of the environmental benefits of products during their use phase. The danger is otherwise to misguide policy due to partial and inconsistent LCAs.



Regarding recycling, the EU should develop comprehensive products’ approaches in order to address shortfalls by working hand-in-hand with industries willing to support recycling initiatives.



More globally, the EU’s environmental policy needs to be very transparent and developed over time according to clearly defined objectives. Buy-in of the different stakeholders and industry must be sought as it is a critical success factor.

2.11.1. Energy & climate policies: please explain the importance of the issue, giving examples and evidence.

Well-designed energy policies offer a unique opportunity to mitigate climate change while providing huge socio-economic benefits. Existing buildings account for more than 40% of EU energy use. Thanks to a combination of state-of-the-art construction products, such as insulating glazing, the energy consumption of existing buildings can be reduced by up to 80%. If the existing building stock could be properly renovated, up to 32% of the energy use today in the EU could be avoided. Investing in building renovation offers many benefits such as cutting CO2 emissions, reducing energy bills, increasing energy security and reducing trade imbalances, tackle chronic unemployment by creating plenty of sustainable and widely accessible local jobs, while providing a stimulus to Europe’s manufacturing base. Building renovation also improves work and living conditions thanks to healthier and more comfortable indoor environment.

2.11.2. Energy & climate policies: how can businesses themselves better respond to these issues?

The glass industry has recently developed new coated and sealed insulating glass products to improve the energy performance of buildings and save huge amount of energy as well as the associated CO2 emissions. Studies by TNO found that over 100 million tonnes of CO2 could be saved annually in Europe if state-of-the art glazing solutions were used, whereas today 85% of glazed areas in buildings are still equipped with glazing with poor insulation performances. Thanks to its R&D, the glass industry continues to develop even more performing products but their market uptakes need to be supported by way of ambitions energy-performance standards in construction and renovation.



Similarly, thanks to its constant investment in R&D, recycling and the systematic use of best available techniques, the glass industry has managed to reduce drastically the energy intensity of its production processes by 77% over the last decades1.

2.11.3. Energy & climate policies: what can policymakers do to address the issues at Member states, local or regional level?

Ambitious transposition and implementation of the recast Energy Performance of Building Directive (EPBD) and the Energy Efficiency Directive (EED) are essential for Europe to reap their full energy saving and economic potential. If properly implemented, these directives can significantly enhance the energy performance of buildings by way of an increase of the renovation rate of buildings and the introduction of stricter energy performance requirements in building codes. It would also boost the market uptake of most advanced products such as highly insulating glass and therefore reward innovative industries. Member states should also ensure that the money allocated to energy efficiency under the various EU funds is fully used to renovate existing buildings such as social housing. Member states should also promote the use of energy saving products for buildings through financial incentives such as tax reductions.

2.11.4. Energy & climate policies: what can policymakers do to address the issues at EU level?

Although the EPBD and the EED are a first step in the right direction, they are not sufficient to properly address the building renovation challenge the EU is facing and to reap all the tremendous business opportunities for the construction sector and the European economy as a whole. Other policy initiatives such as the EU 2020 flagship on Industrial policy, the Sustainable Competitiveness of the Construction Sector Roadmap or the upcoming Communication on Sustainable Buildings must be used to create the market conditions for the uptake of energy efficient products and foster further innovation in that field. To this end, the EU needs to address the private buildings renovation issue by setting a binding long-term objective to offer visibility and credibility to the industry and investors. It also needs to ensure that renovations are performed to the highest available standards in order to maximize energy savings and fully grasp the energy saving potential of buildings.

2.15.1. Other: please explain the importance of the issue, giving examples and evidence.

Ensuring a level-playing field between EU-based industries and their third countries competitors must be a top priority of the EU industrial policy. The development of strict environmental requirements for businesses operating in the EU and the obligation for industries under the ETS to buy carbon emission allowances result in extra costs for EU-based companies, which are reflected in the overall production cost. In third neighboring countries, similar environmental requirements do not exist, energy tends to be cheaper, labour costs are lower, etc. therefore EU-based operators are struggling hard to stay competitive both internationally and in their home market. In the case of the flat glass industry, the number of plants in North Africa is increasing significantly faster than the local market while exports (in some cases even solely) to the EU continue to rise. Despite the EU ETS’s mechanisms, carbon leakage is already happening and is likely to intensify for primary float glass.

2.15.2. Other: how can businesses themselves better respond to these issues?

The lack of a level playing field between EU-based industries and their competitors from third countries is the result of the asymmetry between the strict environmental and climate protection requirements within the EU and the loose rules in third countries. Given the very political and legal nature of this issue, it cannot be solved by businesses but only by public authorities at EU level.



In a commodity market like flat glass, the European based industry is limited in its ability to cope with this challenge without the support of an adequate mix between environmental and trade policies Free Trade Agreements with North Africa and other neighboring countries currently do not address this problem.

2.15.3. Other: what can policymakers do to address the issues at Member states, local or regional level?

To Glass for Europe, this issue is best addressed within an international context. For instance, Europe should seek an ambitious international climate agreement and make sure it is properly implemented before making any unilateral move in terms of binding commitments to reduce its manufacturing CO2 emissions. Trade responses should also be investigated at international level within the framework of WTO rules. In the absence of international agreement, responses should be designed at EU level and not at a local or national level to avoid creating distortion of competition.

2.15.4. Other: what can policymakers do to address the issues at EU level?

As a general rule, the EU should proof-check all its environmental measures against the competitiveness of EU-based industries.



Regarding the EU ETS mechanism, policy-makers need to carefully assess risks of carbon leakage. It is questionable to review the list of industries exposed to risks of carbon leakage three years after the initial list has been established and while Phase III has been in place for less than a year. In addition, one needs to avoid basing its policy on assessments reflecting abnormal recession conditions. At last,systems of compensations for exposed industries need to be revisited to ensure that levels of free compensation are realistic and not artificially reduced.



Finally, the EU should investigate what might be the pros and cons of introducing border adjustment mechanisms and Certified Emission Reductions (CERs) for both imports and exports.



Industry needs foresee ability and a reliable legislative framework for its medium and long-term investments in the EU.

1 In 1960, the energy intensity was 35GJ/tonne of glass against 8GJ/tonne on average today.