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Wednesday, 04 June 2014

Excess from the carbon market estimated at 2.1 billion tons

The Commission admitted that the European Emissions Trading System (ETS) is suffering from an excess of 2.1 billion tons. Environmentalists want the EU excutive to publish more information on the matter.  The European Emissions Trading System (ETS) is expected to contribute to the reduction of carbon dioxide emissions in Europe and to help Member States to achieve their goals in terms of climate. However, at 5 Euros per ton of CO2, the ETS does not really encourage switching from coal to other resources, such as renewable energy or gas. Gas plants, whose CO2 emissions are less significant, have been shut down in various countries. "Because of the increase in coal consumption, Germany could encounter difficulties in achieving the national goal of 40% reduction by 2020," declared one European diplomat to EurActiv. "We believe that to reduce the attractiveness of coal, we need to strengthen the ETS.” France is the driving force in discussions on the reform of the carbon market, and advocates the establishment of a real central bank of carbon. Germany advocates going beyond the regulatory mechanism of carbon prices as presented in the 2030 energy-climate package and proposes the establishment of a quota limit. The Commissioner for Climate Action, Connie Hedegaard praised the 3% decrease in emissions of companies participating in the ETS, according to new estimates. “However, there is still an excess of quotas that continues to grow and risks jeopardizing the proper functioning of the carbon market”, she said. While 1.9 billion tons of carbon dioxide were emitted in 2013, the organization of environmental protection Sandbag estimates that an equivalent amount is currently on the market. The economic recession and excessive granting of free quotas to the industry have contributed to the problem. The number of emission quotas in support of the industry now stands at 1.2 billion. This year, the Commission initially removed information on carbon credits and plans to stop publishing any data on the volume and type of compensation issued under this system. For 2014, the Commission anticipates a reduction of the quota excess, while the process of "shelving" quotas, or back-loading, started in the first quarter of this year.

Source: Euractiv