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The fate of the EU carbon market hangs in the balance

(European Energy Review (you may need to register to access this article), 11 Apr 12) If European policymakers do not intervene soon in the EU's emission trading scheme, Europe's flagship climate policy risks sinking into oblivion. This is bad news when debate is just beginning over a new EU climate and energy package for 2030.

If the EU ETS cannot deliver, what should lie at the heart of this new package? A carbon tax? A myriad of national policies? To save the ETS, many stakeholders - including energy companies - are advocating a "set-aside", or one-off removal of carbon allowances from the market, to raise the CO2 price. Others want a complete overhaul of the system. Sonja van Renssen reports from Brussels.


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The fate of the ETS currently hangs in the balance in the EU. The UK has already decided to introduce its own carbon price floor. Poland is reportedly in talks with one of Brussels' biggest consultancies about how to dismantle the EU’s 2008 climate and energy package. The energy-producing industry is at loggerheads with the energy-consuming industry. The Commission's climate department, primarily responsible for the ETS, says it is in a period of "internal reflection" and cannot comment.

Strangely enough, the person speaking out most about the need to fix the ETS of late has been EU energy commissioner Günther Oettinger rather than EU climate commissioner Connie Hedegaard. At a dinner organised by the European Energy Forum in March, he argued that the current EU carbon price of €6 a tonne is too low to change the European energy system and that something needs to be done about it. He would support a Commission proposal to that effect by September, he announced, while warning at the same time that a carbon price of more than €20 a tonne would not be acceptable to European industry in the present economic climate.

European Energy Review (you may need to register to access this article), 11 Apr 12: The fate of the EU carbon market hangs in the balance


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