There’s little point designing CO2 policies without knowing what other factors are heating up the atmosphere. So it is with aviation. The non-CO2 emissions (aromatics, NOx, SO2, H2O, particulate matter, etc.) from jet engines have up to four times the effect of CO2. You can see it in the contrail cirrus streaks trailing behind aircraft. Carlos LĂłpez de la Osa at Transport & Environment summarises their recent summit that brought together … [Read more...]
“Options to Reform the EU ETS”: coping with price volatility and speculation (event summary)
Sara Stefanini provides a written summary of our panel discussion held on 31st March 2022, “Options to Reform the EU ETS”. It’s a full summary of the 90 minute discussion (with a link to the video), but it begins conveniently with a summary of the highlights, leading with the role of financial players, who they are, the causes of price volatility, what reforms can create stability, and the cost of decarbonisation. The main concern is speculation … [Read more...]
Russia-Ukraine crisis: reforming the EU ETS is a matter of energy security, says PGE
European leaders are now rushing to make decisions on how to drastically cut dependence on Russian fossil energy imports. Russia’s invasion of Ukraine has exposed Europe’s energy security vulnerabilities like nothing else could have. It also means Europe’s clean energy transition will need an overhaul, and a newly designed optimal pathway created, and fast. Wojciech DÄ…browski, President at PGE Polska Grupa Energetyczna, explains that it must also … [Read more...]
If Buildings Renovation fails, the EU ETS pricing mechanism must change
If the EU “Renovation Wave” for buildings fails, the massive ramp up of clean electrification required to compensate will come into direct conflict with EU ETS pricing formulas, say Sebastian Osorio and Michael Pahle at the Potsdam Institute for Climate Impact Research and Oliver Ruhnau at the Hertie School in Berlin. If the cap in the original ETS is too tight relative to the Effort Sharing Regulation (ESR) targets, its carbon prices may rise … [Read more...]
Don’t let high gas prices stop the EU ETS from doing its real job
The EU ETS carbon price reached a high of over €60 per tonne in September. Some are arguing that its role in the current gas price crisis is a reason why it should be reined in. But Milan Elkerbout at CEPS Policy Insights explains that the EUA (European Union Allowance) has multiple purposes. It is an incentive to invest in low-carbon solutions such as renewables, efficiencies and new methods. The sooner we pass the cost hurdle of integrating … [Read more...]
EU “Fit for 55”: how it impacts the EU ETS to accelerate emissions reductions
Christoph Kellermann, Lun Zhou and Simon Göss at Energy Brainpool explain how the EU’s new “Fit for 55” proposals, released in July, will impact the EU Emissions Trading Scheme (EU ETS), hailed as one of the most effective ways of reducing emissions. The authors cover the changes to the existing ETS, the planned new ETS for road transport and buildings, the controversial Carbon Border Adjustment Mechanism (CBAM), and the new CO2 standards for … [Read more...]
‘Fit for 55’ should prioritise decarbonisation of laggards: buildings, transport, industry, agriculture
Today’s long-awaited "Fit for 55" legislative package from the European Commission will trigger intense and difficult negotiations that will last two years, says Nicolas Berghmans at IDDRI. Its scope is wide and inevitably interconnected. The twelve legislative proposals include adjustments to existing measures (renewable energy, energy efficiency, carbon market/EU ETS, energy taxation, climate effort sharing between Member States/ESR, land use … [Read more...]
The EU’s “Fit for 55” package: a primer on the EU ETS and other main policy levers
On July 14 the European Commission will present the much awaited “Fit for 55” legislative package. Lara Dombrowski and Simon Göss at Energy Brainpool have written a very useful primer on what’s at stake for the EU ETS, along with a summary of the other main policy levers that will be decided upon. The authors describe the EU ETS as the central instrument for reducing greenhouse gas emissions. It caps emissions for 10,000 power sector, industrial … [Read more...]
Fit for 55: Does squeeze on gas make coal exit harder? Event summary + video
On May 18, 2021, Energy Post hosted an expert panel with the European Commission, E3G, CERRE and PKEE (the Polish Electricity Association, who also sponsored the discussion). It looked at some of the key EU support mechanisms offered to countries/companies transitioning away from coal, including the EU ETS' Modernisation Fund, the Just Transition Fund  and also how State Aid Guidelines (EEAG) contribute. We asked Stefaan Vergote (Senior Advisor … [Read more...]
Coal exit: EU policy revisions must face both tech and socioeconomic obstacles
By 2030, the EU must cut its emissions by at least 55% compared to 1990 levels. Agreeing on the target was hard enough. Much harder will be agreeing on the design of the rules, regulations and financial support needed to achieve it. Pieter de Pous at E3G scopes out the major decline already experienced by coal - the worst emitting energy source - before looking at the challenges faced by heavy coal users in Central and Eastern Europe (CEE). The … [Read more...]
“The Role of the EU ETS in Decarbonisation to 2030” [written summary of the panel discussion]
Here you can read a summary of the online discussion from March 19th 2021 on the current debate over the review of the EU ETS. The full video is available here. Of primary concern for fossil-dependent lower income nations is the carbon price rising so high that it reduces available budget for investment in clean energy. If that happens there’s clearly a problem. The counter argument is that there are other funding mechanisms available, and more … [Read more...]
“The Role of the EU ETS in Decarbonisation to 2030” [Energy Post event video]
Here you can watch our video of the online discussion from March 19th 2021 on the current debate over the review of the EU ETS. Of primary concern for fossil-dependent lower income nations is the carbon price rising so high that it reduces available budget for investment in clean energy. If that happens there’s clearly a problem. The counter argument is that there are other funding mechanisms available, and more than one pathway for successful … [Read more...]
An EU ETS that lifts carbon prices too high can make clean energy transitions harder
This coming Friday 19th March, 11.00 to 12.30 CET, we have an online panel discussion plus audience Q&A on "The Role of the EU ETS in Decarbonisation to 2030". All are invited. We will dig into how the EU ETS is being shaped to ensure it meets its primary objective, the decarbonisation of Europe. To help set it up, Wanda Buk, Vice-President for Regulatory Affairs at PGE Group answers questions that are being asked of Poland’s position and its … [Read more...]
A beginner’s guide to European climate laws
Confused by the range of EU and national climate laws? The EU-ETS, the Effort-Sharing Regulation, the Renewable Energy Directive, the Energy Efficiency Directive, the Clean Energy for all Europeans Package, LULUCF, and more? Which are the important ones? Who exactly is making policy, and how? What are the real world effects? Julian Wettengel at Clean Energy Wire has asked experts to improve our understanding by answering a list of questions on … [Read more...]
EU ETS: The Market Stability Reserve should focus on carbon prices, not allowance volumes
The Market Stability Reserve (MSR) aims at providing carbon price stability for the EU Emissions Trading Scheme (EU ETS). But serious questions are being asked about how much stability – if any – it provides, say Michael Pahle at the Potsdam Institute for Climate Impact Research and Simon Quemin at the LSE's Grantham Research Institute. They argue that the MSR rules are too complex, have difficulty accommodating changing EU and national policies, … [Read more...]
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