EU business group seeks tighter ETS cap, shorter phases

Published 16:23 on February 17, 2016  /  Last updated at 16:55 on February 17, 2016  /  Bavardage, EMEA, EU ETS  /  No Comments

The Prince of Wales’s Corporate Leaders Group is urging lawmakers to make four changes to the EU ETS reform bill as a first step to fulfilling the ambition the 28-nation bloc committed to in the Paris Agreement.

The Prince of Wales’s Corporate Leaders Group is urging lawmakers to make four changes to the EU ETS reform bill as a first step to fulfilling the ambition the 28-nation bloc committed to in the Paris Agreement.

The group set out its aims hoping to influence MEPs in the EU Parliament’s environment committtee, which meets on Thursday for the assembly’s first public debate on the ETS this year.

The group wants the lawmakers to force the following changes to the post-2020 ETS reform proposal:

  1. Reduce the carbon cap faster.  The European Commission’s proposed 2.2% annual reduction is too slow for Europe’s existing climate commitments, and even further behind the Paris Agreement’s goal of a temperature rise well below 2 degrees C. (The Commission has admitted that the ETS would need a 2.4% annual reduction to stay on its long-term 2C-aligned trajectory)
  2. All allowances auctioned or allocated during Phase 4 (2021-2030) should come from within the Phase 4 cap.
  3. Base allocations for carbon leakage on real world circumstances.  A number of countries and regions have taken on a carbon price in the last few years, and after the Paris Agreement it is likely more will follow. Allocations for carbon leakage sectors should take into account increasing carbon policies faced by major competitors internationally.
  4. Adopt a five-year phase length in line with the review periods of the Paris Agreement, and reflecting the experience of the EU ETS to date, which has shown that improvements to the workings of the scheme may be needed over time.

“A recent study of ten years of the European Emissions Trading System has shown it can and does work to help businesses become more efficient and more competitive.  It’s not perfect, but now is the time to strengthen the system and make it truly world-leading, not weaken it with exceptions and low expectations,” said Jill Duggan of the Cambridge Institute for Sustainability Leadership (CISL), which acts as secretariat to the Corporate Leaders Group.

The appetite for reform among MEPs is quite high ahead of Thursday’s debate, according to Sandrine Dixson-Decleve, director of CISL’s EU office.

“Everyone understands the ETS is one of the first things we need to set right post-Paris,” said Dixson-Decleve, who will leave CISL in mid-April to take up a Brussels-based role on the executive team of the UN-led SE4All initiative.

The Corporate Leaders Group’s members include leaders of 23 companies including major conglomerates Unilever,Tesco and Coca-Cola. It aims to secure a transition to a low-carbon economy, and has frequently pushed the EU to be more ambitious in its climate policy.

By Ben Garside – ben@carbon-pulse.com

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