The new EU Emissions Trading System, ETS 2, covers emissions from buildings, road transport, and additional sectors such as fuel use in small industrial installations. It’s designed to reduce emissions by 42% by 2030 compared to 2005 levels. Florian Schlennert, Simon Göss and Hendrik Schuldt at carboneer describe how it works, and what firms must do to comply. Comprehensive monitoring, reporting, and verification (MRV) must be implemented at the … [Read more...]
EU ETS: what happens when rising Carbon Prices start to hurt low income groups?
The main purpose of the EU Emissions Trading System (EU ETS) is to put a price on emissions and generate revenues from companies buying allowances for creating those emissions. Right now energy, manufacturing and aviation are covered. From 2027, maritime transport will be added to the existing EU ETS, while buildings and road transport will be regulated in the upcoming ETS2. From then, nearly 80% of total EU emissions will be under the ETS and … [Read more...]
The world needs to triple Renewables by 2030. We’re 30% off-target but it can be done
To reach the Paris Agreement target of limiting global warming to 1.5°C, the world needs to triple renewable power capacity by 2030. Here, the IEA summarises its report “COP28 Tripling Renewable Capacity Pledge: Tracking countries’ ambitions and identifying policies to bridge the gap”. The report looks at almost 150 Nationally Determined Contributions (NDCs) which set out each country’s plans, and also looks at actual progress (which in many … [Read more...]
Excessive cross-border accumulation of subsidies can endanger the EU energy transition
EU Member States have inadvertently supported with their own subsidies the renewable energy targets of other Member States, a practice that violates EU internal market rules, explains Kim Talus at UEF Law School. He looks at how Denmark subsidised Danish biomethane producers who exported to Sweden, where Swedish consumers were benefitting from subsidies already. This promoted Danish biomethane producers at the expense of rivals. In December 2022 … [Read more...]
Germany, Italy + 10 others not on track to meet their 2030 climate targets, costing them €billions in carbon credits
12 EU countries are on track to miss their 2030 national climate targets by a large margin, according to a study by T&E. That means they will have to buy carbon credits on such a large scale there will be few left for others to buy their way out of missing their own targets (leaving them facing court cases). Germany and Italy are the two worst performing countries, with France on track by a very close margin. Germany will have to pay … [Read more...]
UCO (Used Cooking Oil) for biofuels: how much is fraudulently imported virgin vegetable oil?
UCO (Used Cooking Oil) is a feedstock for biofuels. In 2023, European countries consumed close to seven million tonnes of UCO for biofuels. This is four times the continent’s maximum potential for supplying it domestically, so the rest comes from imports, mostly from China, Malaysia and Indonesia. The vast majority is blended for biodiesel to use in cars and trucks. UCO accounted for one third of conventional biodiesel feedstocks and a quarter of … [Read more...]
Carbon Pricing annual receipts are almost $100bn globally and rising
About one-quarter of global emissions are, to varying degrees, covered by carbon pricing schemes. They’ve raised over $500bn from polluters to date. Andrew Reid at NorthStone Advisers, writing for IEEFA, summarises his report which says the annual amount raised, now almost $100bn, is set to increase with two-thirds of nations planning to use carbon pricing in their Nationally Defined Contributions. And the EU’s Carbon Border Adjustment Mechanism … [Read more...]
The EU’s Carbon Border Adjustment Mechanism still has 5 serious flaws
Taxing carbon at the border is a lot more complicated than you may think, explains James Bushnell at the Energy Institute at Haas. The EU’s Carbon Border Adjustment Mechanism (CBAM) imposes a tax on imported goods that is designed to reflect the carbon content of those goods. But CBAM has flaws that must be addressed. It taxes the carbon in imported inputs supplied to EU producers, but not the carbon of those same inputs if they are imported as … [Read more...]
June deadline for EU nations’ NECPs: will this year’s plans show they’re taking the climate seriously?
On June 30th, EU Member States have to submit the final revision of their updated National Energy and Climate Plans (NECPs) to the European Commission. NECPs specify their climate and energy targets and trajectories up to 2030, with an outlook to 2040 and the longer term. NECPs must also feature the policies and measures planned to achieve these targets, as well as their funding needs and sources. But, as Federico Mascolo at CAN Europe explains, … [Read more...]
At $2tn, investment in Clean Energy in 2024 is set to be double that for Fossil Fuels
A new report by the IEA reveals that global spending on clean energy technologies and infrastructure is on track to hit $2tn in 2024, driven largely by attractive cost reductions, improving supply chains, energy security, and government policies. This is despite higher financing costs for new projects. The combined investment in renewable power and grids only recently overtook the amount spent on fossil fuels, in 2023. 2024 will see it at double … [Read more...]
Tariffs on China’s carmakers? Chinese joint ventures and on-shoring would be better
Both the U.S. and the EU are targeting China’s carmakers with tariffs. China is accused of providing state support that allows exported vehicles to be sold at cheaper prices than those of global rivals. The tariffs will allow U.S. and EU carmakers to build up their own domestic supply chains and catch up in competitiveness. But cheap EVs help accelerate the clean transition, so tariffs will only slow it down, certainly in the short term. And … [Read more...]
To make Clean Industry stick, the United States needs new trade mechanisms
The industrial sector throughout the world needs to decarbonise. At the same time, no one country wants to incur the costs and risk losing market share to rivals who decarbonise slowly (or not at all!) Hence the EU’s Carbon Border Adjustment Mechanism (CBAM) that imposes costs on carbon-intense imports. This protects clean EU industries while incentivising importers to get going with decarbonisation or lose their European customers. Allegra Dawes … [Read more...]
It’s time to sanction Rosatom subsidiaries, part of Russia’s LNG production chain
Following Russia’s invasion of Ukraine, the West and its allies imposed a series of sanctions to cut dependence on Russian oil and gas imports, as well as hit Russian import earnings. Ihor Moshenets at the Central European University points to a serious sanctions blind spot: Rosatom, Russia’s nuclear major. Rosatom has avoided sanctions because it is ostensibly a nuclear technology provider, with long term commitments to Europe that do not … [Read more...]
REPowerEU gas reduction is exceeding targets. But that means the same 2025 target can see gas rise again
The REPowerEU policy has done well so far in its aim of ending Europe’s dependency on Russian fossil fuels by 2027. The target of 15% reduction in gas use, compared to the average consumption between April 2017 and March 2022, was exceeded in both 2023 and 2024. The Commission has again set the same 15% target for the coming year. However, by doing so the very many EU countries that have succeeded so well in exceeding that target are effectively … [Read more...]
The EU’s inaugural Hydrogen subsidy auction. What have we learned?
At the end of April, the winners were announced of the first pilot auction to allocate subsidies for EU hydrogen production via the European Hydrogen Bank. The winning bids were between €0.37 and €0.48 per kg, much lower than the €4 – €6 per kg estimated “green premium” cost gap between renewable hydrogen and fossil hydrogen in Europe. The low bids mean companies applied for fewer subsidies than needed to bridge that “green premium” gap because … [Read more...]
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