The EU must not put any more carbon allowances into the Emissions Trading Scheme because it is already “overflowing”, the European Wind Energy Association (EWEA) said today.
The EU ETS is a scheme which gives firms working in Europe allowances for the carbon emissions they create. It is meant to encourage them to cut carbon and encourage investment in clean technology.
Rémi Gruet, Senior Regulatory Affairs Advisor for the EWEA said: “The EU ministers need to ensure no more emissions allowances are put on the market. This must be included in the Energy Efficiency Directive, currently being negotiated between the Council of Ministers and the European Parliament.”
He said this was the “only upcoming legislative opportunity” to push such a measure.
His comments come as EU ministers met in Denmark yesterday to discuss the future of the EU’s Emissions Trading Scheme (ETS).
It also follows calls from a group of major investors for reform of the emissions scheme.
Going one step further than the EWEA, the Institutional Investors Group on Climate Change (IIGCC) wants “a one off setaside of carbon credits in order to remove oversupply from the system”.
The IIGCC includes some of the largest pension funds in Europe, representing around €7.5trillion.
Stephanie Pfeifer, its Executive Director said: “The EU ETS was expected to support emission reductions by catalysing innovation and driving investment in low carbon solutions. This is not happening.”
She added the carbon price’s current level, at under seven euros per tonne, “is not even high enough to support a switch from coal to gas”, which could impact on “long-term” investments in low carbon energy sources.