In the past few months, carbon intensive industries have ratcheted up their efforts to convince policymakers that ‘real’ data should be used to assess how many free pollution permits to give out under the EU’s carbon market rules. Carbon Market Watch also values the use of accurate, up-to-date information in the debate on the EU Emissions Trading System (ETS) reform. We therefore checked two recent claims by the industry.
EU Climate Blog
On Monday 20 June, the EU environment ministers will discuss whether the proposed revisions of the EU’s carbon market are enough to bring the bloc’s flagship climate instrument in line with the Paris climate change agreement. In this article, Carbon Market Watch answers key questions to help ministers come up with an appropriate response. Do […]
This week, the rapporteur of the European Parliament’s Environment committee (Ian Duncan) published his draft report on the EU’s carbon market reform, kicking off the legislative debate. Disappointingly, the proposal fails to address the most pressing issues that need fixing in order to make the EU ETS fit-for-purpose and in line with the Paris climate agreement.
In April the Court of Justice of the European Union ruled against a case by carbon-intensive industries that had sought additional free pollution permits from the EU’s Emissions Trading System (ETS). The Court’s declaration backfired on the companies, when it ruled that the allocation of free permits had in fact been too generous, giving the Commission 10 months to recalculate the amount of free permits for the period up to 2020.
The crisis facing the British steel industry has over the past week dominated front pages with the news that Tata Steel will sell all of its UK plants. Some have finger-pointed to the EU’s Emissions Trading System (EU ETS) as one of the reasons for the disarray in the steel industry, but analysis done for Carbon Market Watch and by others has shown that the steel sector in Europe has in fact benefited from EU’s climate policies.
While European policymakers are debating how the EU’s Emissions Trading System (EU ETS) should be revised in the wake of the Paris agreement, the fall in the carbon price to below €6 per tonne of pollution gives a stark warning that Europe’s (supposedly) main climate instrument is not yet up to the job. Without the removal of surplus pollution permits, the adoption of a steeper decarbonisation pathway and the smart use of auctioning revenues, Europe’s carbon market will be doomed to fail.
The climate summit in Paris left many negotiators who had worked for days without sleep with a sense of relief. The Paris agreement marks a major step forward to averting a climate catastrophe. But as we are heading to a 3 degrees warmer world, far from the aspirational 1.5°C goal, we simply cannot afford to stand still. Now is the time to turn the global climate deal into a springboard for more climate action worldwide. And who better than ‘high ambition’ champion Europe to spearhead this movement from words to action?
The concept of “carbon leakage” is a major area of discussion in the legislative proposal to revise the EU’s Emissions Trading System (EU ETS) for the post-2020 period. The Commission’s proposal continues the trend of awarding free allowances, effectively representing a financial subsidy of €160 billion, to heavy emitters without providing evidence for the need of such beneficial treatment. A new Carbon Market Watch policy brief “Carbon leakage myth buster” shows how certain manufacturing companies have profited from selling the free EU ETS allowances they were given and recommends how to avoid such windfall profits in the future.
Analysis by the European Environment Agency (EEA) finds that last year, the EU reduced its domestic greenhouse gas emissions by 23% compared to 1990 levels. No extra efforts are needed from now up to 2020 for the EU to meet its climate target of 20% emission reductions. Carbon Market Watch calls on the EU to increase its 2020 climate target to avoid that climate actions in the EU come to a halt. A higher 2020 target will also ensure that surplus credits generated until 2020 cannot be used to offset emissions in the 2030 climate framework.