Set-aside plan ‘will not fix’ carbon price problem
Commission official says simply setting aside emissions allowances will not be enough to address carbon issues.
Setting aside allowances in the EU’s emissions trading scheme (ETS) in order to increase the carbon price “will not be enough” to fix the situation, an official from the European Commission’s energy department said today.
Speaking at a meeting held by Eurelectric, the association of the electricity industry in Europe, Olivier Onidi, deputy head of cabinet for Günther Oettinger, the European commissioner for energy, said the price of carbon is “not right” and “will need to increase”.
But he said that simply setting aside a number of excess allowances will not be enough. The comments come ahead of a vote tomorrow by the European Parliament’s industry committee in which MEPs are expected to call for a set-aside. The Parliament’s environment committee has already backed setting aside allowances.
Other ideas for fixing the low carbon price have included increasing the 2020 emissions reduction target, and lowering the ETS ‘cap’ – the maximum amount of allowances that can be held by each sector. In December, the Parliament’s environment committee called for the cap to fall over the 2013-20 period by 2.25% annually instead of the current 1.75%.
Onidi said the Commission has told industry groups that are resisting any changes to the ETS that their stance is “not very helpful”.
Speaking at the conference, Eurelectric’s secretary-general, Hans Ten Berge, said the current carbon price is having no impact on investment decisions. He pointed out that renewable energy now accounts for 60%-70% of new generation investment. “That means decarbonisation is functioning without the pressure of [a higher] ETS price,” he said.
He said a bigger problem was a lack of coherence between the three policy instruments to reduce emissions – the renewable energy directive, the energy efficiency directive and the emissions trading scheme.
This approach, combining mandatory targets with auctioning and binding measures, is not creating an energy market that people want to invest in, Ten Berge said. He said as long as the situation remains the same, there will never be a decent carbon price.