Oct 09 2015

An NER1000?

The EC’s proposals for Europe’s Emissions Trading Scheme for the period 2021-2030 would give away too many carbon allowances for free, says Carbon Market Watch. Many of the 6.3 bn allowances to be given to companies at risk of carbon leakage will inhibit them from producing more efficiently or investing in innovative technologies that reduce CO2 says the campaigning organisation. “A wide range of technological options to reduce emissions in these carbon-intensive sectors are available that remain unexploited. Free allocation shields industrial sectors from the carbon price signal and puts European industry at risk of falling behind in deploying low-carbon, state-of-the-art technologies compared to their competitors abroad.”

Carbon Market Watch calls for free allocation of allowances only for those sectors that are both heavily reliant on exports (or exposed to imports) and very carbon-intense, and even then, only for “the share of carbon costs that are not passed on to customers”. On the other hand, it calls for ETS Innovation Fund to be boosted to a fund of 1000 million allowances, ‘NER1000’, to help industry innovate and regain technological prowess in efficient production.

Its report, Carbon leakage myth buster, is here.