EU emission rules ‘could increase costs and hinder decarbonisation’

Implementing new emissions rules proposed by the EU could have significant unintended consequences for the global transition to a clean energy system. That’s according to a new report from industry […]

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By Jonny Bairstow

Implementing new emissions rules proposed by the EU could have significant unintended consequences for the global transition to a clean energy system.

That’s according to a new report from industry group EURELECTRIC, which has looked into the effects of limiting pollution from generators participating in capacity mechanisms.

The EU law would block electricity producers whose carbon discharges exceed 550 of carbon dioxide per kilowatt hour, a level that would exclude coal from the system.

The group claims this could backfire and risk making decarbonisation significantly more expensive.

It adds the intended green effects of this measure will be negligible as the electricity sector’s emissions are already capped under the Emissions Trading System.

It claims the move would force existing plants into early retirement – these plants would then need to be replaced by new conventional power facilities to provide essential baseload.

This could lead to additional costs of up to €50 billion (£44bn) between 2020 and 2040 and would lock countries into more polluting forms of energy, for example a 40% increase in gas consumption in the power sector.

The report warns this would divert investments worth €20 billion (17.6bn) away from renewables and other clean technologies.