Eu 배출권 거래 시스템 가격

EU 배출권 거래 시스템 (EU ETS)
EU 배출권 거래 시스템은 설명했다.
EU 배출권 거래 시스템 (EU ETS)은 기후 변화에 대처하기위한 EU의 정책과 온실 가스 배출을 비용 효과적으로 줄이기위한 핵심 도구의 초석입니다. 그것은 세계 최초의 주요 탄소 시장이며 여전히 가장 큰 탄소 시장입니다.
31 개국 (모두 28 개 EU 국가와 아이슬란드, 리히텐슈타인 및 노르웨이)은 11,000 개 이상의 무거운 에너지 사용 시설 (발전소 및 산업 설비)에서 배출량을 제한하고 이들 국가간에 운영되는 항공사는 EU 온실 가스의 약 45 % 배출.
자세한 개요는 다음을 참조하십시오.
'모자와 무역'시스템.
EU ETS는 '상한 및 무역'원칙에 따라 작업합니다.
한도는 시스템에 의해 보호되는 시설에서 배출 될 수있는 특정 온실 가스의 총량으로 설정됩니다. 총 배출량이 감소하도록 시간이 지남에 따라 배출량이 감소합니다.
상한선 내에서 회사는 필요에 따라 서로 교역 할 수있는 배출권을 받거나 구입합니다. 그들은 또한 전세계의 배출 저감 사업으로부터 국제 신용을 제한적으로 구입할 수 있습니다. 이용 가능한 총 허용 한도의 한도로 인해 가치가 있음을 보장합니다.
해마다 회사는 모든 배출량을 충당하기 위해 충분한 수당을 내야하며, 그렇지 않으면 무거운 벌금이 부과됩니다. 회사가 배출량을 줄이면 예비 수당을 유지하여 미래의 필요를 충당하거나 수당이 부족한 다른 회사에 판매 할 수 있습니다.
Trading은 최소 비용으로 배출량을 줄이는 유연성을 제공합니다. 견고한 탄소 가격은 또한 깨끗하고 저탄소 기술에 대한 투자를 촉진합니다.
3 단계 (2013-2020)의 주요 기능
EU ETS는 현재 3 단계에 있으며 단계 1 및 2와는 상당히 다릅니다.
주요 변경 사항은 다음과 같습니다.
이전의 전국 대두 시스템 대신에 EU 배출권 한도가 적용된다. 경매는 공짜 할당 대신 공제액을 할당하는 기본 방법이며, 공짜로 할당 된 공제액에 조화 된 할당 규칙이 적용된다. 가스에는 NER 300 프로그램을 통해 혁신 신 재생 에너지 기술 및 탄소 포집 및 저장 배치에 자금을 지원하는 신입 자 예비 (New Entrants Reserve)에 3 억 개의 수당이 포함되었습니다.
섹터와 가스가 덮였습니다.
이 시스템은 높은 정확도로 측정, 보고 및 검증 될 수있는 배출물에 중점을 둔 다음 분야 및 가스를 포함합니다.
철강 공장 및 철, 알루미늄, 금속, 시멘트, 석회, 유리, 세라믹, 펄프, 종이, 판지, 산 및 벌크 유기 화학 물의 생산을 포함한 전력 및 열 발생 에너지 집약 산업 분야의 이산화탄소 (CO2) 질산, 아 디프 산 및 글리 옥실 산 및 글리 옥살 퍼플 루오로 카본 (PFCs)의 생산으로 인한 상업용 아산화 질소 (N2O).
EU ETS 참여는이 부문의 기업에게는 필수적이지만,
일부 분야의 경우에만 특정 크기 이상의 공장 만 포함됩니다. 정부가 항공 부문에서 동등한 양의 배출량을 감축하는 재정 또는 기타 조치를 취하면 소규모 시설을 제외 할 수 있습니다. EU ETS는 그 사이의 항공편에만 적용됩니다 유럽 ​​경제 지역 (EEA)에 위치한 공항.
배출 감축 제공.
EU ETS는 탄소에 가격을 매기고 탄소를 거래하면 효과가 있음을 증명했습니다. 계획에서의 설비에서의 배출량은 3 단계 (2013 년) (2015 년 수치 참조)의 시작과 비교하여 약 5 % 정도 의도 한대로 감소하고 있습니다.
2020 년에는 시스템이 차지하는 부문의 배출량이 2005 년보다 21 % 감소 할 것입니다.
탄소 시장 개발.
2005 년에 설립 된 EU ETS는 국제 탄소 거래의 4 분의 3 이상을 차지하는 세계 최초이자 최대 규모의 국제 배출권 거래 시스템입니다.
EU ETS는 또한 다른 국가 및 지역에서 배출권 거래의 발전을 고무하고 있습니다. EU는 EU ETS와 다른 호환 시스템을 연결하는 것을 목표로합니다.
주요 EU ETS 법안.
2013 년 4 월 30 일 - 유럽 의회와 이사회의 Directive 2003 / 87 / EC의 통합 버전으로 공동체 내의 온실 가스 배출 허용 거래 계획 수립 및 이사회 지침 96 / 61 / EC 23/04/2009 수정 - 지역 사회의 온실 가스 배출 허용량 거래 제도를 개선 및 확대하기 위해 2003 / 87 / EC 지침을 개정하는 유럽 의회 및 이사회의 2009 / 29 / EC 지침 19/11/2008 - Directive 2008 / 101 / EC 2004 년 10 월 27 일 - 유럽 의회의 2004 / 101 / EC Directive 2004 / 101 / EC의 Directive 2003 / 87 / EC를 개정하여 유럽 의회 내에서 온실 가스 배출 허용 거래를위한 항공 활동을 포함하는 유럽 의회와 이사회 이사회는 교토 의정서의 프로젝트 메카니즘과 관련하여 공동체 내에서 온실 가스 배출 허용 거래에 관한 계획을 수립하는 2003 / 87 / EC 지침을 개정 13/10/2003 - 유럽 의회와 EU의 지침 2003 / 87 / EC 공동체 내에서 온실 가스 배출 허용 거래를위한 계획을 수립하고 이사회 지침 96 / 61 / EC를 개정한다.
탄소 시장 보고서.
2011 년 1 월 23 일 - COM (2017) 693 - 유럽 탄소 시장의 기능에 관한보고 01/02/2017 - COM (2017) 48 - 유럽 탄소 시장의 기능에 관한 보고서 18/11/2015 - COM 2015) 576 - 유럽 탄소 시장의 기능에 관한 보고서 14/11/2012 - COM (2012) 652 - 2012 년 유럽의 탄소 시장 현황.
3 단계 EU ETS 개정.
2011 년 4 월 2 일 - 2011 년 2 월 4 일의 유럽 이사회 결론 (결론 23 및 24 참조) 18/03/2010 - EU ETS 지침 (항공 활동 제외)의 부속서 I에 대한 지침 18/03/2010 - 지침 기후 변화 및 에너지 패키지 채택에 관한 협의회 보도 자료 12/12/2008 - 유럽 이사회 의장단 결론 (2008 년 12 월 11 일과 12 월 12 일) 12/12/2008 - 유럽위원회 경매 수익 사용에 관한 성명서 23/01/2008 - 공동체의 온실 가스 배출 허용 거래 시스템을 개선하고 확장하기 위해 유럽 의회와 이사회가 지침 2003 / 87 / EC를 개정하는 지침의 제안 23 / 2008 년 1 월 - 위원회 직원 문서 - EU 온실 가스 배출 허용 거래 시스템을 개선하고 확장하기 위해 지침 2003 / 87 / EC를 개정하는 유럽 의회와 이사회 지침에 대한 제안서 첨부 문서 - 영향 평가.
이행.
04/07/2013 - 국제 신용 자격 결정에 관한 개정 된 초안 규칙 05/06/2013 - 국제 신용 증서 결정에 관한 초안 규칙 05/05/2013 2013 년 5 월 2 일의 Commission Regulation (EU) No. 389/2013에 따라 Union Registry 설립 유럽 ​​의회와 이사회의 2003 / 87 / EC 지침, Decisions No 280 / 2004 / EC 및 No 406 / 2009 / EC의 유럽 의회와 이사회 및 Commission Regulations (EU) No 920/2010을 폐지하고 No 1193/2011 EEA 관련성있는 문서 18/11/2011 - 2013 년 1 월 1 일부터 시작되는 거래 기간과 이후의 거래 기간에 대한 EU 집행위원회 설립 지침 (2003 / 87 / EC 지침 유럽 ​​의회와 유럽 의회 및 이사회의 결정 및 의사 결정 280 / 2004 / EC 및 개정 규정 (EC) No 2216/2004 및 (EU) No 920/2010 - 공식 저널 07 / 10/2010 - 위원회 Regul 유럽 ​​의회와 이사회의 2003 / 87 / EC 지침 및 유럽 의회와 이사회의 Decision No 280 / 2004 / EC에 따른 레지스트리의 표준화되고 보안 된 시스템에 대한 920/2010 유럽 ​​의회 및 이사회의 2003 / 87 / EC 지침에 따라 표준화되고 안전한 등록 시스템에 대한 Commission Regulation (EC) No 994/2008 EU의 ETS와 노르웨이, 아이슬란드 및 리히텐슈타인을 연결하는 EEA 공동위원회 결정 No 146/2007 2011 년 12 월 31 일까지 적용 가능한 버전 - 유럽 의회와 이사회의 결정 No 280 / 2004 / EC - 2011 년 12 월 31 일까지 적용되는 버전 13 / 11 / 2006 - 유럽 의회와 이사회의 2003 / 87 / EC 지침에 따라 교토 의정서에 따른 사업 활동을위한 공동체 배출권 거래 제도에 따른 온실 가스 배출 감축에 대한 DOUBLE COUNTING 피하기에 관한위원회 결정 2006 / 780 / EC (n 문서 번호 C (2006) 5362에 의거 해) 2002 년 12 월 12 일 - 7 월 31 일자위원회 규정 (EC) No 916/2007에 의해 개정 된 표준화되고 안전한 등록 시스템에 대한 EC (Commission Regulation) 2216/2004의 통합 버전 2007 년 11 월 18 일 규정에 의한 변경 사항을 제외하고 2008 년 10 월 8 일의 Commission Regulation (EC) No 994/2008 및 2010 년 10 월 7 일의 Commission Regulation (EU) No 920/2010.
부가가치세 적용.
지침 2003 / 87 / EC의 입법 연혁.
위원회 제안 이전에 일하십시오.
08/2002 - COM (2000) 87 - 유럽 연합 집행위원회의 온실 가스 배출량 보고서 및 ECCP 실무 그룹 1의 결과 : 유연한 메커니즘 04/09/2001 - 의장 요약문 이해 관계자 자문 회의 기록 (Industry 1999 년 5 월 19 일 - COM (1999) 230 - 교토 의정서 이행을위한 준비 03/06/1998 - COM (1998) 353 - EU ETS의 EU 포스트 교토 전략 범위를 향한 기후 변화 : 07/2007 - EU 배출권 거래 시스템 내의 소규모 설비 - 2006 년 10 월 - EU 배출권 거래 시스템에 추가 활동 및 가스 추가 조화 및 예측 가능성 증대 : 12/2006 - 신규 진입 및 폐쇄에 대한 접근 10/2006 - EU에서의 CO2 배출권 경매 ETS 10/2006 - 할당 방법의 조화 12/2006 - 국제 경쟁력에 대한 보고서 EU ETS의 검토를위한 배출권 거래에 관한 ECCP 실무 그룹 15/06/2007 - 4th mee의 최종 보고서 2007 년 제 3 국의 배출권 거래 시스템 연계에 관한 협조 22/05/2007 - 추가 조화 및 예측 가능성에 관한 제 3 차 회의의 최종 보고서 26/04/2007 - 강력한 준수 및 시행에 관한 제 2 차 회의 최종 보고서 09/03/2007 - 지침의 범위에 관한 제 1 차 회의의 최종 보고서.
2001 년 10 월의 집행위원회 제안.
2002 년 2 월 22 일 - EC 배출권 거래 제안 (COM (2001) 581)과 IPPC Directive 23/10/2001 - COM (2001) 581 사이의 시너지 효과에 관한 비공식 문서 - 온실 가스 배출권 거래 지침 유럽 ​​공동체 내에서
위원회와 의회에서 제안서를 읽는 것에 대한위원회의 반응 (위원회의 공동 입장 포함)
18/07/2003 - COM (2003) 463 - 유럽 의회와 이사회의 지침에 관한 이사회의 공동 입장에 대한 유럽 의회 개정안에 대한위원회의 의견 20/06/2003 - COM (2003) 364 - 유럽 의회에서 온실 가스 배출 허용 거래에 관한 계획을 수립하고 이사회 지침 96 / 61 / EC 18/03/2003 - EC (Common Position)를 개정하는 지령 채택에 관한 이사회의 공통 입장에 관한 유럽 의회와의 커뮤니케이션 ) No 28/2003 - 공동체 내에서 온실 가스 배출 허용 거래에 관한 계획 수립 및 이사회 지침 96 / 61 / EC 27/11/2002 수정 - COM (2002) 680 - 수정 된 제안 유럽 ​​의회와 이사회가 지 역 내에서 온실 가스 배출 허용량 거래 계획을 수립하고 이사회 지침 96 / 61 / EC를 개정 함.
모든 질문을 엽니 다.
개정 된 EU 배출권 거래 시스템에 관한 질문 및 답변 (2008 년 12 월)
배출권 거래의 목표는 무엇입니까?
EU 배출권 거래 시스템 (EU ETS)의 목표는 EU 회원국들이 온실 가스 배출량을 비용 효과적인 방식으로 제한하거나 줄이겠다는 약속을 달성하도록 돕는 것입니다. 참가 업체가 배출 허용량을 사고 팔 수 있다는 것은 배출량 삭감이 최소 비용으로 달성 될 수 있음을 의미합니다.
EU ETS는 EU의 기후 변화 대응 전략의 초석입니다. 그것은 세계 최초의 CO 2 배출권 거래 시스템으로 2005 년부터 운영되고 있습니다. 2008 년 1 월 현재, EU 27 개 회원국뿐만 아니라 유럽 경제 지역의 다른 3 개 회원국에도 적용됩니다 - 노르웨이, 아이슬란드 및 리히텐슈타인. 현재 EU의 CO2 배출량의 절반에 가까운 부분과 총 온실 가스 배출량의 40 %를 공동으로 담당하는 에너지 및 산업 부문의 설치량은 10,000 개가 넘습니다. 2008 년 7 월에 합의 된 EU ETS Directive에 대한 개정안은 2012 년부터 항공 분야를 시스템으로 가져올 것입니다.
배출권 거래는 어떻게 이루어 집니까?
EU ETS는 '배출권 거래'시스템으로, 허용되는 전체 배출 수준을 제한하지만 그 한도 내에서 시스템 참여자는 필요에 따라 수당을 사고 팔 수 있습니다. 이러한 수당은 시스템의 중심에있는 일반적인 거래 '통화'입니다. 하나의 수당은 소유자에게 1 톤의 이산화탄소 또는 동등한 양의 다른 온실 가스를 방출 할 권리를 부여합니다. 총 수당의 한도는 시장에 희소성을 창출합니다.
이 계획에 따른 첫 번째 및 두 번째 거래 기간에 회원국은 ETS 배출량의 총 수준과 각 국가의 배출 허용량을 결정하는 국가 할당 계획 (NAP)을 작성해야했습니다. 해마다 설치물은 배출량과 동일한 허용량을 내야합니다. 배출량을 허용 수준 이하로 유지하는 회사는 초과 수당을 판매 할 수 있습니다. 탄소 배출량을 줄이는 데 어려움을 겪고있는 사람들은보다 효율적인 기술에 투자하거나 탄소 집약적 인 에너지 자원을 덜 사용하는 것과 같이 자신의 배출량을 줄이기위한 조치를 취하거나 시장에서 필요로하는 추가 공제를 구입하는 것 중에서 선택합니다 , 또는이 둘의 조합을 포함 할 수있다. 그러한 선택은 상대적 비용에 의해 결정될 것 같다. 이런 식으로 배출 가스가 가장 비용 효율적으로 감소됩니다.
EU ETS는 얼마 동안 운영되고 있습니까?
EU ETS는 2005 년 1 월 1 일에 시작되었습니다. 첫 거래 기간은 2007 년 말까지 3 년 동안 진행되었으며 중요한 두 번째 거래 기간을 준비하기 위해 '수행함으로써 학습'단계였습니다. 두 번째 교역 기간은 2008 년 1 월 1 일에 시작되어 2012 년 말까지 5 년간 운영됩니다. 두 번째 교역 기간의 중요성은 교토 의정서의 첫 번째 공약 기간과 일치한다는 사실에서 비롯됩니다. EU와 기타 선진국들은 온실 가스 배출을 제한하거나 줄이기 위해 목표를 달성해야한다. 두 번째 무역 기간 동안 EU ETS 배출량은 EU 전체와 회원국이 개별적으로 교토 의정서를 이행 할 수 있도록 2005 년 수준보다 약 6.5 % 가량 낮았다.
지금까지 경험으로 얻은 교훈은 무엇입니까?
EU ETS는 탄소 가격을 책정하여 온실 가스 배출량 거래가 효과가 있음을 입증했습니다. 첫 번째 무역 기간은 EU 전역의 배출 허용량에 대한 자유 무역을 성공적으로 수립하고 필요한 인프라를 구축하고 역동적 인 탄소 시장을 개발했습니다. 일부 회원국과 일부 부문에서 EU ETS 하에서 검증 된 배출량 자료가 이용 가능해질 때까지 배출 전망에 의존하기 때문에 과도한 수당 할당으로 인해 1 단계의 환경 편익이 제한 될 수있다. 2005 년에 검증 된 배출량 자료를 발표했을 때이 "초과 분배"가 강조되었을 때 시장은 용인 수당의 시장 가격을 낮춤으로써 예상대로 반응했다. 확인 된 배출 자료의 이용 가능성은위원회가 제 2 단계에서의 국가 배정에 대한 상한이 실제 배출 감축을 가져 오는 수준으로 설정되도록 보장했다.
검증 된 데이터에 대한 필요성을 강조하는 것 외에도 EU의 ETS 내에서의보다 큰 조화는 EU가 최소한의 비용과 최소한의 경쟁 왜곡으로 배출 감축 목표를 달성하는 데 필수적임을 보여주었습니다. 더 많은 조화를위한 필요성은 전반적인 배출 허용 한도가 어떻게 설정되는지에 관해서는 가장 명확하다.
처음 두 거래 기간은 설비에 대한 할당량을 할당하는 국가 별 방법이 국내 시장에서의 공정한 경쟁을 위협한다는 점을 보여줍니다. 또한 시스템의 범위, EU 외부의 배출 감축 사업에서 얻은 크레딧에 대한 접근, 다른 곳의 배출권 거래 시스템과 EU ETS를 연결하기위한 조건 및 모니터링, 검증 및 검증과 관련하여 더 큰 조화, 명확화 및 개선이 필요하다. 보고 요구 사항.
EU ETS의 주요 변경 사항은 무엇이며 언제 적용됩니까?
합의 된 설계 변경 사항은 2013 년 1 월 3 번째 거래 기간에 적용됩니다. 준비 작업이 즉시 시작되지만 규정 준수가 유지되도록 2013 년 1 월까지 해당 규칙이 변경되지 않습니다.
제 3 기 EU ETS는보다 효율적이고 조화로운 시스템이 될 것입니다.
효율성 증대는 거래 기간이 길어지면 (5 년 대신 8 년), 연간 배출량 상한선 감소 (2005 년 대비 2020 년 21 % 감소) 및 경매 금액이 크게 증가 2 단계에서 4 %, 3 단계에서 절반 이상.
cap-setting (1 단계와 2 단계에서 전국 대문자가 아닌 EU 전역의 CAP)과 과도기적 자유 할당에 관한 규정을 포함하여 많은 분야에서보다 많은 조화가 합의되었다.
시스템의 공정성은 산업 설비에 대한 EU 전역의 자유 할당 규칙으로의 이동과 신입 회원국이 더 많은 수당을 경매 할 수있는 재분배 메커니즘의 도입으로 실질적으로 증가했다.
마지막 텍스트는 초기위원회 제안과 어떻게 비교됩니까?
2007 년 봄 유럽 이사회에서 합의한 기후 및 에너지 목표는 유지되었으며 EU ETS에 대한위원회의 제안의 전반적인 아키텍처는 그대로 유지됩니다. 즉, 배출권 수에 대한 EU 차원의 한도가 상한선이 될 것이며, 이 상한선은 선형 추세선을 따라 매년 감소 할 것이며 이는 2013 년 -2020 년 3 차 거래가 끝날 때까지 계속 될 것입니다. 제안과 비교 된 주요 차이점은 수당 경매가 더 천천히 단계적으로 이루어질 것이라는 점입니다.
위원회의 제안과 비교 된 주요 변경 사항은 무엇입니까?
요약하면 제안에 대한 주요 변경 사항은 다음과 같습니다.
특정 회원국은 2013 년 현재 전기 요금을 무료로 할당 할 수 없다는 규칙을 선택적으로 일시적으로 철회 할 수있다. 이 회유 옵션은 전기의 상호 연결성과 관련된 특정 조건을 충족하는 회원국이 사용할 수있다 그리드, 전기 생산에서의 단일 화석 연료 점유율, EU-27 평균과 관련한 GDP / capita를 포함한다. 또한, 회원국이 발전소에 할당 할 수있는 무상 수당의 양은 1 단계에서 관련 플랜트의 이산화탄소 배출량의 70 %로 제한되고 그 이후에는 감소합니다. 또한 3 단계의 무료 할당은 2008 년 말까지 운영 또는 건설중인 발전소에만 제공 될 수 있습니다. 아래 질문 15에 대한 회신을 참조하십시오. 탄소 누출의 중대한 위험에 노출 될 것으로 여겨지는 부문 또는 하위 부문을 결정하는 데 사용되는 기준에 관한 지침에 더 많은 세부 사항이 있으며위원회의 해당 부문 목록 발간 일 (12 월 31 일) 2009). 또한 만족스러운 국제 협약에 도달했을 때 검토를 거쳐 노출 된 모든 산업의 설비는 가장 효율적인 기술을 사용하는 범위까지 100 % 무료 수당을 받게됩니다. 산업에 대한 무상 할당은 2005 년에서 2007 년까지 총 배출량에서 이들 산업의 배출량의 비율로 제한됩니다. 산업 부문의 설치에 무료로 할당되는 총 허용량은 배출량 상한선 감소와 함께 매년 감소 할 것입니다. 회원국은 또한 CO 2 비용이 탄소 누출의 위험에 노출 될 수있는 경우 전기 가격으로 전달되는 이산화탄소 비용에 대한 특정 시설을 보상 할 수 있습니다. 위원회는 이와 관련하여 환경 보호를위한 주정부 지원에 관한 공동체 지침을 수정하려고 노력했다. 아래 질문 15에 대한 회신을보십시오. 비공개 산업에 대한 경매 허용 수준은위원회가 제안한 바와 같이 선형 적으로 증가 할 것이지만, 2020 년까지 100 %에 도달하는 대신 70 %에이를 것이며 2027 년까지 100 %에 도달 할 전망이다. 위원회의 제안에 따르면 경매 허용 여력의 10 %는 1 인당 소득이있는 회원국에서 1 인당 소득이 낮은 회원국으로 재분배되어 후자가 기후 친화적 인 기술에 투자하도록 재정적 능력을 강화할 것이다. 2005 년에 교토 의정서가 정한 기준 연도에 비해 온실 가스 배출량을 적어도 20 % 감축 한 회원국을 고려한 경매 허용 비율의 2 % 재분배 메커니즘에 대한 조항이 추가되었습니다. 회원국들이 주로 EU 내 기후 변화에 맞서 싸우고 적응하기 위해 권장하는 경매 수입의 비율은 개발 도상국에서 20 %에서 50 %로 상향 조정됩니다. 이 텍스트는 해당 기간 동안 할당 및 액세스와 관련하여 해당 크레딧을 가져오고 사용하는 가장 낮은 예산을받은 기존 운영자에 대해 20 % 시나리오에서 JI / CDM 크레딧 사용을 제안 된 허용 수준에 대한 상향 조정을 제공합니다 2008-2012. 새로운 분야, 기간 2013-2020 년 및 2008-2012 년에있는 신입자는 또한 신용을 이용할 수있을 것이다. 그러나 사용될 수있는 총 크레딧 금액은 2008 년과 2020 년 사이의 감축 량의 50 %를 초과하지 않을 것입니다. 만족스러운 국제 협정의 맥락에서보다 엄격한 배출 감축 량을 감안할 때위원회는 CER 및 ERU에 대한 추가 액세스를 허용 할 수 있습니다 커뮤니티 스킴의 운영자에게 적합합니다. 아래 20 번 질문에 대한 회신을보십시오. 신규 진입자 보호 지역에서 3 억회의 경비를 경매하는 수익금은 최대 12 개의 탄소 포집 및 저장 시범 프로젝트와 혁신적인 신 재생 에너지 기술을 시연하는 프로젝트를 지원하는 데 사용될 것입니다. 이 자금 조달 메커니즘에는 여러 가지 조건이 붙어 있습니다. 아래 질문 30에 대한 회신을보십시오. 소규모 연소 설비를 차단하는 방안이 동등한 조치가 취해진다면, 소규모 설비를 모든 활동에 관계없이 확대 적용 할 수 있으며, 배출 임계 값은 1 년에 10,000 ~ 25,000 톤의 CO2를 증가시키고, 연소 설비가 추가적으로 25MW에서 35MW로 증가되어야한다. 이러한 임계치가 증가함에 따라 잠재적으로 배출권 거래 시스템에서 제외 될 수있는 배출량의 비율이 상당 해지며 결과적으로 EU 전체의 배출량 상한선을 감축하는 조항이 추가되었다.
여전히 국가 배정 계획 (NAPs)이 있습니까?
아니오. NAPs에서 첫 번째 (2005-2007) 및 두 번째 (2008-2012) 거래 기간 동안 회원국은 발행 할 수당 총액 (총액)과 해당 시설에 대한 할당 방법을 결정했습니다. 이 접근법은 각 회원국이 자체 산업을 선호하는 인센티브를 창출하고 할당 규칙에 중대한 차이를 야기했으며, 이는 매우 복잡하게되었습니다.
세 번째 거래 기간부터는 단일 EU 전체 한도가 생기고 수당은 조화 된 규칙에 따라 배정 될 것입니다. 그러므로 국가 할당 계획은 더 이상 필요하지 않을 것이다.
어떻게 3 단계의 배출권 규제가 결정될 것인가?
EU 전체 상한선을 계산하는 규칙은 다음과 같습니다.
2013 년부터 연간 총 수당은 선형 적으로 감소 할 것입니다. 이 행의 출발점은 회원국이 2013 년부터 시스템의 확대 된 범위뿐만 아니라 회원국의 모든 소규모 시설을 반영하여 조정 된 2008-12 회계 연도의 회원국에 의해 발행 된 평균 총 허용량 (2 단계 상한선)입니다. 국가는 제외하도록 선택했습니다. 연간 금액이 감소 할 선형 요인은 2 단계 상한과 관련하여 1.74 %입니다.
1.74 %의 선형 인자를 결정하기위한 출발점은 1990 년에 비해 20 %의 온실 가스 감축이며 이는 2005 년에 비해 14 % 감소한 것과 같습니다. EU ETS는 EU ETS에 비해 더 큰 감축이 필요합니다. ETS 분야에서 배출량을 줄이기 위해 더 싸게. 전반적인 감축 비용을 최소화하는 부문은 다음과 같습니다 :
2020 년까지 EU ETS 부문 배출량이 2005 년 대비 21 % 감소합니다. EU ETS의 적용을받지 않는 분야의 경우 2005 년에 비해 약 10 %의 감소를 보였다.
2020 년의 21 % 감축은 2020 년 최대 1720 백만 배당의 ETS 상한선을 가져오고, 1846 년의 평균 공제 금액 (2013 년에서 2020 년까지)과 2 단계 상한선 대비 11 % 감축을 의미합니다.
모든 절대 수치는 두 번째 거래 기간 시작 시점의 보상 범위에 해당하므로 2012 년에 추가 될 항공 및 3 단계에서 추가 될 기타 부문을 고려하지 않습니다.
3 단계의 연간 배출량 상한에 대한 최종 수치는 2010 년 9 월 30 일까지위원회가 결정하고 발표 할 예정이다.
3 단계 이상의 배출량 산정 방법은 어떻게 결정됩니까?
3 단계 상한선을 결정하기 위해 사용 된 1.74 %의 선형 요인은 2020 년에 거래 기간이 끝나는 시점을 넘어 계속 적용될 것이며 4 번째 거래 기간 (2021 년에서 2028 년)까지의 기간을 결정하게됩니다. 늦어도 2025 년까지 개정 될 수 있습니다. 사실 세계 평균 기온 상승을 산업화 이전 수준보다 2 ℃ 이상으로 제한하는 전략적 목표를 달성하기 위해서는 1990 년 대비 60 % -80 %의 상당한 배출량 감소가 2050 년까지 필요합니다.
배출권에 대한 EU 차원의 상한선은 각 개별 연도별로 결정될 것입니다. 해당 설비의 유연성이 감소 할 것인가?
아니요. 설치 유연성은 전혀 줄어들지 않습니다. 매년 2 월 28 일까지 관할 당국은 경매와 배분을 허용해야한다. 수당을내는 마지막 날은 배출이 발생한 연도의 다음 해 4 월 30 일입니다. 그래서 운영자는 전년도에 대한 배출량을 충당하기 위해 용돈을 상환해야하기 전에 당해 연도에 대한 용돈을받습니다. 수당은 거래 기간 동안 유효하게 유지되며 이후 잉여 수당은 이후 거래 기간에 사용하기 위해 "뱅킹"될 수 있습니다. 이 점에서 아무것도 변하지 않을 것입니다.
이 시스템은 거래 기간을 기반으로 유지되지만, 3 차 거래 기간은 2008 년에서 2012 년까지의 두 번째 단계에서 5 년이 아니라 2013 년에서 2020 년까지 8 년 동안 지속됩니다.
두 번째 거래 기간 동안 회원국은 일반적으로 매년 동일한 총 수당을 할당하기로 결정했다. 2013 년부터 매년 감소하는 선형 적 감소는 해당 기간에 예상되는 배출량 경향에 더 잘 부합 할 것입니다.
2013 년에서 2020 년 사이의 잠정 ETS 총액은 얼마입니까?
잠정 연간 cap 수치는 다음과 같습니다.
이 수치는 2 단계 (2008 년 ~ 2012 년)에서 적용 가능한 ETS의 범위와 2 단계에 대한 국가 배분 계획에 대한위원회의 결정에 따라 2 억 8,300 만 톤에 달한다. 이 수치는 여러 가지 이유로 조정됩니다. 첫째, 회원국이 이러한 확대에서 발생하는 배출량을 입증하고 확인한다면, 2 단계에서 범위 확장을 고려하여 조정할 것이다. 둘째, 세 번째 거래 기간에 ETS의 범위를 추가로 확장하는 것과 관련하여 조정이 이루어질 것이다. 셋째, 소규모 설비의 선택 해제는 상응하는 모자의 축소로 이어질 것입니다. 넷째, 수치는 항공의 포함이나 노르웨이, 아이슬란드 및 리히텐슈타인의 배출량을 고려하지 않았습니다.
수당은 여전히 ​​무료로 할당됩니까?
예. 산업 설비는 과도기적으로 무료 할당을 받게됩니다. 그리고 선택적 탈선을 할 수있는 회원국에서는 발전소가 회원국이 결정한 경우 무료 수당을받을 수있다. 2013 년 현재 사용 가능한 보조금의 최소한 절반이 경매 될 것으로 추산됩니다.
위원회는 1 차 및 2 차 무역 기간 동안 대다수의 수당이 설비에 무료로 할당되었지만, 위원회는 수당 경매가 배분의 기본 원칙이되어야한다고 제안했다. 경매가 가장 효율적이어서 시스템의 효율성, 투명성 및 단순성을 보장하고 저탄소 경제에 대한 투자에 가장 큰 인센티브를 제공하기 때문입니다. "오염 자 부담 원칙"을 가장 잘 준수하며 무료로 수령 함에도 불구하고 명목상의 비용 공제 비용을 고객에게 전가 한 특정 부문에 이익을주는 것을 피합니다.
수당은 어떻게 무료로 나누어 줄 수 있습니까?
2010 년 12 월 31 일까지, 위원회는위원회 절차 ( "Comitology") 하에서 개발 될 EU 차원의 규칙을 채택 할 것입니다. 이 규칙은 할당을 완전히 조화 시키므로 동일하거나 유사한 활동을하는 EU의 모든 회사는 동일한 규칙을 따릅니다. 이 규칙은 배정이 탄소 효율 기술을 촉진 할 수 있도록 가능한 한 많이 보장 할 것입니다. 채택 된 규칙은 실행 가능한 한도 내에서 소위 벤치 마크에 기반한 할당을 제공한다. 과거 산출물의 수량 당 많은 수당. 이러한 규칙은 온실 가스를 줄이기위한 조기 조치를 취한 운영자에게 보상하며, 오염원 부담 원칙을보다 잘 반영하고, 배출량을 줄이기위한 더 강력한 인센티브를 제공한다. 할당은 더 이상 과거 배출량에 의존하지 않기 때문이다. 모든 배정은 3 차 거래 시작 전에 결정되어야하며 사후 조정은 허용되지 않습니다.
어떤 설치가 무료 할당을 받고 어떤 설치는 그렇지 않을 것입니까? 경쟁력에 대한 부정적인 영향은 어떻게 피할 것인가?
증가 된 배출 비용을 감당할 수있는 능력을 감안할 때, 2013 년 이후 전기 경보기에 대한 전체 경매가 원칙입니다. However, Member States who fulfil certain conditions relating to their interconnectivity or their share of fossil fuels in electricity production and GDP per capita in relation to the EU-27 average, have the option to temporarily deviate from this rule with respect to existing power plants. The auctioning rate in 2013 is to be at least 30% in relation to emissions in the first period and has to increase progressively to 100% no later than 2020. If the option is applied, the Member State has to undertake to invest in improving and upgrading of the infrastructure, in clean technologies and in diversification of their energy mix and sources of supply for an amount to the extent possible equal to the market value of the free allocation.
In other sectors, allocations for free will be phased out progressively from 2013, with Member States agreeing to start at 20% auctioning in 2013, increasing to 70% auctioning in 2020 with a view to reaching 100% in 2027. However, an exception will be made for installations in sectors that are found to be exposed to a significant risk of 'carbon leakage'. This risk could occur if the EU ETS increased production costs so much that companies decided to relocate production to areas outside the EU that are not subject to comparable emission constraints. The Commission will determine the sectors concerned by 31 December 2009. To do this, the Commission will assess inter alia whether the direct and indirect additional production costs induced by the implementation of the ETS Directive as a proportion of gross value added exceed 5% and whether the total value of its exports and imports divided by the total value of its turnover and imports exceeds 10%. If the result for either of these criteria exceeds 30%, the sector would also be considered to be exposed to a significant risk of carbon leakage. Installations in these sectors would receive 100% of their share in the annually declining total quantity of allowances for free. The share of these industries' emissions is determined in relation to total ETS emissions in 2005 to 2007.
CO 2 costs passed on in electricity prices could also expose certain installations to the risk of carbon leakage. In order to avoid such risk, Member States may grant a compensation with respect to such costs. In the absence of an international agreement on climate change, the Commission has undertaken to modify the Community guidelines on state aid for environmental protection in this respect.
Under an international agreement which ensures that competitors in other parts of the world bear a comparable cost, the risk of carbon leakage may well be negligible. Therefore, by 30 June 2010, the Commission will carry out an in-depth assessment of the situation of energy-intensive industry and the risk of carbon leakage, in the light of the outcome of the international negotiations and also taking into account any binding sectoral agreements that may have been concluded. The report will be accompanied by any proposals considered appropriate. These could potentially include maintaining or adjusting the proportion of allowances received free of charge to industrial installations that are particularly exposed to global competition or including importers of the products concerned in the ETS.
Who will organise the auctions and how will they be carried out?
Member States will be responsible for ensuring that the allowances given to them are auctioned. Each Member State has to decide whether it wants to develop its own auctioning infrastructure and platform or whether it wants to cooperate with other Member States to develop regional or EU-wide solutions. The distribution of the auctioning rights to Member States is largely based on emissions in phase 1 of the EU ETS, but a part of the rights will be redistributed from richer Member States to poorer ones to take account of the lower GDP per head and higher prospects for growth and emissions among the latter. It is still the case that 10% of the rights to auction allowances will be redistributed from Member States with high per capita income to those with low per capita income in order to strengthen the financial capacity of the latter to invest in climate friendly technologies. However, a provision has been added for another redistributive mechanism of 2% to take into account Member States which in 2005 had achieved a reduction of at least 20% in greenhouse gas emissions compared with the reference year set by the Kyoto Protocol. Nine Member States benefit from this provision.
Any auctioning must respect the rules of the internal market and must therefore be open to any potential buyer under non-discriminatory conditions. By 30 June 2010, the Commission will adopt a Regulation (through the comitology procedure) that will provide the appropriate rules and conditions for ensuring efficient, coordinated auctions without disturbing the allowance market.
How many allowances will each Member State auction and how is this amount determined?
All allowances which are not allocated free of charge will be auctioned. A total of 88% of allowances to be auctioned by each Member State is distributed on the basis of the Member State's share of historic emissions under the EU ETS. For purposes of solidarity and growth, 12% of the total quantity is distributed in a way that takes into account GDP per capita and the achievements under the Kyoto-Protocol.
Which sectors and gases are covered as of 2013?
The ETS covers installations performing specified activities. Since the start it has covered, above certain capacity thresholds, power stations and other combustion plants, oil refineries, coke ovens, iron and steel plants and factories making cement, glass, lime, bricks, ceramics, pulp, paper and board. As for greenhouse gases, it currently only covers carbon dioxide emissions, with the exception of the Netherlands, which has opted in emissions from nitrous oxide.
As from 2013, the scope of the ETS will be extended to also include other sectors and greenhouse gases. CO 2 emissions from petrochemicals, ammonia and aluminium will be included, as will N2O emissions from the production of nitric, adipic and glyocalic acid production and perfluorocarbons from the aluminium sector. The capture, transport and geological storage of all greenhouse gas emissions will also be covered. These sectors will receive allowances free of charge according to EU-wide rules, in the same way as other industrial sectors already covered.
As of 2012, aviation will also be included in the EU ETS.
Will small installations be excluded from the scope?
A large number of installations emitting relatively low amounts of CO 2 are currently covered by the ETS and concerns have been raised over the cost-effectiveness of their inclusion. As from 2013, Member States will be allowed to remove these installations from the ETS under certain conditions. The installations concerned are those whose reported emissions were lower than 25 000 tonnes of CO 2 equivalent in each of the 3 years preceding the year of application. For combustion installations, an additional capacity threshold of 35MW applies. In addition Member States are given the possibility to exclude installations operated by hospitals. The installations may be excluded from the ETS only if they will be covered by measures that will achieve an equivalent contribution to emission reductions.
How many emission credits from third countries will be allowed?
For the second trading period, Member States allowed their operators to use significant quantities of credits generated by emission-saving projects undertaken in third countries to cover part of their emissions in the same way as they use ETS allowances. The revised Directive extends the rights to use these credits for the third trading period and allows a limited additional quantity to be used in such a way that the overall use of credits is limited to 50% of the EU-wide reductions over the period 2008-2020. For existing installations, and excluding new sectors within the scope, this will represent a total level of access of approximately 1.6 billion credits over the period 2008-2020. In practice, this means that existing operators will be able to use credits up to a minimum of 11% of their allocation during the period 2008-2012, while a top-up is foreseen for operators with the lowest sum of free allocation and allowed use of credits in the 2008-2012 period. New sectors and new entrants in the third trading period will have a guaranteed minimum access of 4.5% of their verified emissions during the period 2013-2020. For the aviation sector, the minimum access will be 1.5%. The precise percentages will be determined through comitology.
These projects must be officially recognised under the Kyoto Protocol’s Joint Implementation (JI) mechanism (covering projects carried out in countries with an emissions reduction target under the Protocol) or Clean Development Mechanism (CDM) (for projects undertaken in developing countries). Credits from JI projects are known as Emission Reduction Units (ERUs) while those from CDM projects are called Certified Emission Reductions (CERs).
On the quality side only credits from project types eligible for use in the EU trading scheme during the period 2008-2012 will be accepted in the period 2013-2020. Furthermore, from 1 January 2013 measures may be applied to restrict the use of specific credits from project types. Such a quality control mechanism is needed to assure the environmental and economic integrity of future project types.
To create greater flexibility, and in the absence of an international agreement being concluded by 31 December 2009, credits could be used in accordance with agreements concluded with third countries. The use of these credits should however not increase the overall number beyond 50% of the required reductions. Such agreements would not be required for new projects that started from 2013 onwards in Least Developed Countries.
Based on a stricter emissions reduction in the context of a satisfactory international agreement , additional access to credits could be allowed, as well as the use of additional types of project credits or other mechanisms created under the international agreement. However, once an international agreement has been reached, from January 2013 onwards only credits from projects in third countries that have ratified the agreement or from additional types of project approved by the Commission will be eligible for use in the Community scheme.
Will it be possible to use credits from carbon ‘sinks’ like forests?
No. Before making its proposal, the Commission analysed the possibility of allowing credits from certain types of land use, land-use change and forestry (‘LULUCF’) projects which absorb carbon from the atmosphere. It concluded that doing so could undermine the environmental integrity of the EU ETS, for the following reasons:
LULUCF projects cannot physically deliver permanent emissions reductions. Insufficient solutions have been developed to deal with the uncertainties, non-permanence of carbon storage and potential emissions 'leakage' problems arising from such projects. The temporary and reversible nature of such activities would pose considerable risks in a company-based trading system and impose great liability risks on Member States. The inclusion of LULUCF projects in the ETS would require a quality of monitoring and reporting comparable to the monitoring and reporting of emissions from installations currently covered by the system. This is not available at present and is likely to incur costs which would substantially reduce the attractiveness of including such projects. The simplicity, transparency and predictability of the ETS would be considerably reduced. Moreover, the sheer quantity of potential credits entering the system could undermine the functioning of the carbon market unless their role were limited, in which case their potential benefits would become marginal.
The Commission, the Council and the European Parliament believe that global deforestation can be better addressed through other instruments. For example, using part of the proceeds from auctioning allowances in the EU ETS could generate additional means to invest in LULUCF activities both inside and outside the EU, and may provide a model for future expansion. In this respect the Commission has proposed to set up the Global Forest Carbon Mechanism that would be a performance-based system for financing reductions in deforestation levels in developing countries.
Besides those already mentioned, are there other credits that could be used in the revised ETS?
예. Projects in EU Member States which reduce greenhouse gas emissions not covered by the ETS could issue credits. These Community projects would need to be managed according to common EU provisions set up by the Commission in order to be tradable throughout the system. Such provisions would be adopted only for projects that cannot be realised through inclusion in the ETS. The provisions will seek to ensure that credits from Community projects do not result in double-counting of emission reductions nor impede other policy measures to reduce emissions not covered by the ETS, and that they are based on simple, easily administered rules.
Are there measures in place to ensure that the price of allowances won't fall sharply during the third trading period?
A stable and predictable regulatory framework is vital for market stability. The revised Directive makes the regulatory framework as predictable as possible in order to boost stability and rule out policy-induced volatility. Important elements in this respect are the determination of the cap on emissions in the Directive well in advance of the start of the trading period, a linear reduction factor for the cap on emissions which continues to apply also beyond 2020 and the extension of the trading period from 5 to 8 years. The sharp fall in the allowance price during the first trading period was due to over-allocation of allowances which could not be “banked” for use in the second trading period. For the second and subsequent trading periods, Member States are obliged to allow the banking of allowances from one period to the next and therefore the end of one trading period is not expected to have any impact on the price.
A new provision will apply as of 2013 in case of excessive price fluctuations in the allowance market. If, for more than six consecutive months, the allowance price is more than three times the average price of allowances during the two preceding years on the European market, the Commission will convene a meeting with Member States. If it is found that the price evolution does not correspond to market fundamentals, the Commission may either allow Member States to bring forward the auctioning of a part of the quantity to be auctioned, or allow them to auction up to 25% of the remaining allowances in the new entrant reserve.
The price of allowances is determined by supply and demand and reflects fundamental factors like economic growth, fuel prices, rainfall and wind (availability of renewable energy) and temperature (demand for heating and cooling) etc. A degree of uncertainty is inevitable for such factors. The markets, however, allow participants to hedge the risks that may result from changes in allowances prices.
Are there any provisions for linking the EU ETS to other emissions trading systems?
예. One of the key means to reduce emissions more cost-effectively is to enhance and further develop the global carbon market. The Commission sees the EU ETS as an important building block for the development of a global network of emission trading systems. Linking other national or regional cap-and-trade emissions trading systems to the EU ETS can create a bigger market, potentially lowering the aggregate cost of reducing greenhouse gas emissions. The increased liquidity and reduced price volatility that this would entail would improve the functioning of markets for emission allowances. This may lead to a global network of trading systems in which participants, including legal entities, can buy emission allowances to fulfil their respective reduction commitments.
The EU is keen to work with the new US Administration to build a transatlantic and indeed global carbon market to act as the motor of a concerted international push to combat climate change.
While the original Directive allows for linking the EU ETS with other industrialised countries that have ratified the Kyoto Protocol, the new rules allow for linking with any country or administrative entity (such as a state or group of states under a federal system) which has established a compatible mandatory cap-and-trade system whose design elements would not undermine the environmental integrity of the EU ETS. Where such systems cap absolute emissions, there would be mutual recognition of allowances issued by them and the EU ETS.
What is a Community registry and how does it work?
Registries are standardised electronic databases ensuring the accurate accounting of the issuance, holding, transfer and cancellation of emission allowances. As a signatory to the Kyoto Protocol in its own right, the Community is also obliged to maintain a registry. This is the Community Registry, which is distinct from the registries of Member States. Allowances issued from 1 January 2013 onwards will be held in the Community registry instead of in national registries.
Will there be any changes to monitoring, reporting and verification requirements?
The Commission will adopt a new Regulation (through the comitology procedure) by 31 December 2011 governing the monitoring and reporting of emissions from the activities listed in Annex I of the Directive. A separate Regulation on the verification of emission reports and the accreditation of verifiers should specify conditions for accreditation, mutual recognition and cancellation of accreditation for verifiers, and for supervision and peer review as appropriate.
What provision will be made for new entrants into the market?
Five percent of the total quantity of allowances will be put into a reserve for new installations or airlines that enter the system after 2013 (“new entrants”). The allocations from this reserve should mirror the allocations to corresponding existing installations.
A part of the new entrant reserve, amounting to 300 million allowances, will be made available to support the investments in up to 12 demonstration projects using the carbon capture and storage technology and demonstration projects using innovative renewable energy technologies. There should be a fair geographical distribution of the projects.
In principle, any allowances remaining in the reserve shall be distributed to Member States for auctioning. The distribution key shall take into account the level to which installations in Member States have benefited from this reserve.
What has been agreed with respect to the financing of the 12 carbon capture and storage demonstration projects requested by a previous European Council?
The European Parliament's Environment Committee tabled an amendment to the EU ETS Directive requiring allowances in the new entrant reserve to be set aside in order to co-finance up to 12 demonstration projects as requested by the European Council in spring 2007. This amendment has later been extended to include also innovative renewable energy technologies that are not commercially viable yet. Projects shall be selected on the basis of objective and transparent criteria that include requirements for knowledge sharing. Support shall be given from the proceeds of these allowances via Member States and shall be complementary to substantial co-financing by the operator of the installation. No project shall receive support via this mechanism that exceeds 15% of the total number of allowances (i. e. 45 million allowances) available for this purpose. The Member State may choose to co-finance the project as well, but will in any case transfer the market value of the attributed allowances to the operator, who will not receive any allowances.
A total of 300 million allowances will therefore be set aside until 2015 for this purpose.
What is the role of an international agreement and its potential impact on EU ETS?
When an international agreement is reached, the Commission shall submit a report to the European Parliament and the Council assessing the nature of the measures agreed upon in the international agreement and their implications, in particular with respect to the risk of carbon leakage. On the basis of this report, the Commission shall then adopt a legislative proposal amending the present Directive as appropriate.
For the effects on the use of credits from Joint Implementation and Clean Development Mechanism projects, please see the reply to question 20.
What are the next steps?
Member States have to bring into force the legal instruments necessary to comply with certain provisions of the revised Directive by 31 December 2009. This concerns the collection of duly substantiated and verified emissions data from installations that will only be covered by the EU ETS as from 2013, and the national lists of installations and the allocation to each one. For the remaining provisions, the national laws, regulations and administrative provisions only have to be ready by 31 December 2012.
The Commission has already started the work on implementation. For example, the collection and analysis of data for use in relation to carbon leakage is ongoing (list of sectors due end 2009). Work is also ongoing to prepare the Regulation on timing, administration and other aspects of auctioning (due by June 2010), the harmonised allocation rules (due end 2010) and the two Regulations on monitoring and reporting of emissions and verification of emissions and accreditation of verifiers (due end 2011).

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Climate targets suffer as carbon price slumps.
The EU’s flagship emissions trading scheme runs into yet more problems.
1/26/16, 8:35 PM CET.
Updated 1/27/16, 6:13 PM CET.
Political gridlock and collapsing commodities sent the carbon price in the EU’s Emissions Trading System spiraling to a 20-month low this week, making it even more unlikely that polluters will be encouraged to cut greenhouse gas emissions.
The plummeting price is a blow for the already reeling ETS, which was supposed to be the EU’s main vehicle for getting polluters to cut emissions but has so far been plagued with problems. Under the system, companies receive or buy permits to emit a ton of CO2, with the goal of prompting them to steeply reduce emissions over time.
But wildly gyrating prices undercut that rationale.
There are two main reasons for the unexpected drop in carbon prices: politics and economics.
First the politics.
The fall, in a market already plagued by dismal prices, comes as the European Parliament and EU countries prepare to debate the European Commission’s proposals for reforming the ETS after 2020.
The fundamental problem is that Europe’s sluggish economy combined with a boom in renewable and energy efficient technology has created a huge surplus in the emissions market, pulling the price down to a high of about €8 per ton, rather than the €30 or more needed to encourage a shift away from emissions-intensive coal.
Even that €8 per ton is looking pretty good right now. The price of the benchmark contract for emitting a ton of carbon dropped by more than 7 percent to €5.91 on Monday. On Tuesday, prices rose slightly to €6.10.
Those kinds of prices aren’t at all what was supposed to happen when the ETS was created, and Brussels is now trying to fix the scheme.
The EU took a first step to fix the system last year, creating the Market Stability Reserve to soak up surplus permits. But Poland has filed suit at the European Court of Justice to annul the introduction of the reserve. Warsaw says the reform creates uncertainty in the ETS, and they’ve been trying to protect the country’s smokestack industries from higher costs.
Now the Commission’s 2020 reform effort is being held up in the European Parliament with infighting between two of its most influential committees: environment and industry.
Then the economics.
The debate in Brussels was probably not the main thing on traders’ minds as they watched the carbon market start the week with a flurry of short-selling by industrial players, market analysts said.
“What is happening is only on the sidelines of overall turmoil in the markets. Market participants are looking at gas and oil and coal,” said Philipp Ruf, lead analyst for EU carbon markets at ICIS Tschach Solutions.
Ian Duncan, the European Conservatives and Reformists MEP overseeing ETS reform, agrees that the “rock-bottom” oil price is likely the single biggest cause of the fall in carbon prices. However, the fact that the price could fall by so much in just one day reflects an underlying problem in the system: too many allowances.
“When you see a carbon price that’s so low, even modest fluctuations appear to be amplified,” Duncan said. “I’d say the oil price was a bigger factor than the debate in Parliament, but it is difficult to tease out.”
The carbon price fall comes on the heels of a particularly brutal month in global commodity markets.
Crude oil prices hit around $28 per barrel last week, leading to speculation that they could slide to as little as $10 — a spectacular fall from more than $100 about 18 months ago. Oil prices have dragged down natural gas prices, shrinking a previously wide gap between the high cost of burning gas to generate power and low cost of burning coal, even though coal emits much more carbon dioxide. The economic slowdown in China has made matters worse, cutting into demand from one of the world’s biggest and fastest-growing markets for oil, gas and coal.
That means it now makes sense for utilities to generate power with gas rather than coal, leaving them with unused emissions permits that can be sold on.
As well, metals producers hustled to sell emissions allowances when a plunging Chinese stock market made it clear that commodities demand there was unlikely to rebound.
All of these factors came to a head on the EU’s carbon market on Monday, said Marcus Ferdinand, manager of EU carbon analysis at Point Carbon.
“It depends really on a calming of the current bear-trend for traders to feel confident enough to enter long positions and bet on a rebound again. A rebounding oil price would definitely be a major factor in this,” he said.
Battle in the Parliament.
While it may take a much broader market recovery to resuscitate European carbon prices, a little more certainty on the ETS reform could come out of the Parliament as soon as Thursday, when political party chairmen meet.
The ETS reform falls under the environment committee’s purview, as the EU’s primary tool for tackling climate change. But the industry committee has asked to oversee measures in the reform to set up a fund for the bloc’s poorest countries to modernize their power generators and to keep European industries from moving their operations to countries with looser environmental rules.
“The [environment] committee has always been lead committee on climate change matters, and anything that erodes that matter would cause unease,” Duncan said.
The dispute has caused delays in the discussions, which were expected to start soon after the Paris climate summit in December.
The problem is that there is a lot of uncertainty around the future of the ETS reform, said Sarah Deblock, EU policy director at the International Emissions Trading Association, pointing to the Parliamentary debate and Poland’s lawsuit over the Market Stability Reserve.
“It’s a reflection of volatility in the market and the lack of certainty and lack of clarity on what might affect the EU ETS,” Deblock said of the carbon price drop. “Any development would help create a feeling that the work is beginning. A political commitment to revising the EU ETS post-2020 should help restore market fundamentals.”
This article was updated to correct the attribution of a quote.
Related stories on these topics:
답장 취소.
Below the pictures should be, clouds of steam above cooling towers. The existing description of the photograph, “Exhaust plumes….” is a manipulation.
Posted on 1/27/16 | 9:27 AM CET.
Frank Watson.
Most of the points here are well made, but the headline makes a big mistake: “Climate targets suffer as carbon price slumps.” The EU’s climate targets for 2020 under the EU ETS were met in 2014, six years ahead of schedule (1.816 billion tons to be precise). That’s why the carbon price is so low. Other factors have delivered the agreed CO2 cuts, leaving the carbon market high and dry.
There are many faults in Europe’s carbon market, but a failure to meet the CO2 targets is not one of them. Keep in mind, the purpose of the EU carbon market is not to create a high price for carbon. It is to deliver a specific reduction over an agreed timeline, at the lowest cost. The really big mistake was not building in a mechanism from the start that would allow flexibility in the CO2 cap, to react to demand-side shocks. As a result of that failure, the market is still weighed down by a surplus of permits caused by the global slowdown in 2008-2009 and overlapping EU climate and energy policies. Until those factors are understood and dealt with by the EU, expect low prices for carbon in Europe.
Posted on 1/27/16 | 9:31 PM CET.
This sentence: ‘The fundamental problem is that Europe’s sluggish economy combined with a boom in renewable and energy efficient technology has created a huge surplus in the emissions market, pulling the price down to a high of about €8 per ton, rather than the €30 or more needed to encourage a shift away from emissions-intensive coal.’
seems to contradict this sentence: ‘That means it now makes sense for utilities to generate power with gas rather than coal, leaving them with unused emissions permits that can be sold on.’
1. A boom in renewable energy clearly represents a shift from coal. Did this occur with €30/ton? or less? If it is happening anyway does the ETS have any impact on the uptake of renewables?
2. Are utilities/polluters shifting from coal or aren’t they?
Posted on 2/9/16 | 5:32 PM CET.
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Eu emissions trading system prices

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Q&A: Will the reformed EU Emissions Trading System raise carbon prices?
Simon Evans.
Simon Evans.
In July 2003, at a series of meetings in Brussels and Strasbourg, EU lawmakers adopted an Emissions Trading System (EU ETS) to help combat climate change.
The cap-and-trade scheme for industrial CO2 was part of the EU’s response to the Kyoto Protocol, which had set the then-15 member bloc a target to cut emissions 8% below 1990 levels by 2012.
Even before its adoption, the EU ETS was subject to years of fraught debate, lobbying and negotiation. After it started operating in 2005, it quickly ran into trouble, facing volatile carbon prices that crashed in the wake of the financial crisis, while industry pocketed windfall profits.
Prices have remained stubbornly low ever since, undermining the supposed role of the ETS as the cornerstone of EU climate policy.
However, last month, after two years of talks, “strengthening reforms” were finally agreed between the EU’s 28 member state governments, the European Commission and MEPs in the European Parliament.
In this Q&A, Carbon Brief runs through the details of the reforms and whether they will raise EU carbon prices. The Brexit question is also covered.
Why did the EU adopt a carbon market?
For the climate policy purists, “putting a price on carbon” represents the most economically efficient means to reduce emissions, at the lowest cost. In a cap-and-trade scheme, industries covered by the market buy and sell allowances to emit greenhouse gases, within a cap that shrinks over time.
This idea is reflected in the text of the 2003 directive, establishing the EU ETS so as to “promote reductions of greenhouse gas emissions in a cost-effective and economically efficient manner”. In more extreme versions of this view, no other policies should be needed, as the shrinking cap is all that is needed to meet carbon targets (more on this, below).
The directive had been adopted after failed attempts to introduce a carbon energy tax, first proposed in 1992. It also marked a change of heart. The EU had opposed use of carbon markets under the Kyoto Protocol because of concerns over “hot air” – the idea that emissions caps might credit reductions that had already happened. (See this detailed history for more.)
Announcing the adoption of the EU ETS on 23 July 2003, the environment commissioner Margot Wallström said in a statement: “Today’s proposal and the emissions trading system just adopted by the Council and the European Parliament are evidence of our strong commitment to cutting greenhouse gas emissions and to the Kyoto Protocol.”
In the “recital” (introduction) to the latest reforms, the ETS is described as the “cornerstone of the Union’s climate policy”. The ETS cap is now set to shrink to 43% below 2005 levels in 2030, as part of the overall EU 2030 target to cut emissions “at least 40%” below 1990 levels.
What does the EU ETS cover?
The EU ETS is the world’s largest carbon market (see graphic, below), at least until China launches its national market, due for launch this year, but subject to delays and uncertainty.
Carbon pricing schemes around the world, including their nature (ETS or carbon tax), sectoral coverage and share of national or regional emissions. Source: State and Trends of Carbon Pricing 2017, World Bank.
The EU ETS covers airlines and more than 11,000 industrial sites, responsible for around 45% of EU greenhouse gas emissions – currently around 2bn tonnes of CO2 equivalent. This includes CO2 from industry, the power sector and aviation, plus nitrous oxide and perfluorocarbons from industry. (This handy European Commission primer has more background.)
CO 2 equivalent: Greenhouse gases can be expressed in terms of carbon dioxide equivalent, or CO 2 eq. For a given amount, different greenhouse gases trap different amounts of heat in the atmosphere, a quantity known as the global warming potential. Carbon dioxide equivalent is a way of comparing emissions from all greenhouse gases, not just carbon dioxide.
Only flights between EU member states are covered, with flights outside the bloc still exempted, pending a review of the international aviation emissions trading scheme known as CORSIA.
Norway, Iceland and Liechtenstein also participate in the EU ETS. Meanwhile, the EU and Switzerland recently agreed to link their schemes – following seven years of talks – meaning emissions credits can be traded between the two.
Who pays for EU ETS allowances?
Also embedded in the initial 2003 ETS directive is the “polluter pays principle” and, as such, industry should pay for its carbon emissions. In the initial phases, however, most emissions credits were handed out for free, first to familiarise participants with the system and create a functioning market, then later to protect industry from overseas competition not facing a carbon price.
The recital (introduction) to the reform text explains:
“[The 2003 ETS directive] provides for a transition to full auctioning over time. Avoiding carbon leakage is a justification to temporarily postpone full auctioning, and targeted free allocation of allowances to industry is justified in order to address genuine risks of increases in greenhouse gas emissions in third countries where industry is not subject to comparable carbon constraints as long as comparable climate policy measures are not undertaken by other major economies.”
In the first phase, from 2005 to 2007, virtually 100% of carbon credits entering the market were given out for free, falling to an average of 96% during phase 2, from 2008 to 2012, according to an analysis of market data by carbon market NGO Sandbag, carried out for Carbon Brief, shown in the chart, below.
During phase 3, which runs until 2020, the free share fell dramatically because power stations stopped receiving allowances for free. Sandbag’s analysis suggests an average of 53% of the allowances entering the market during phase 3 will be free.
Share of emissions allowances entering the market each year that are allocated for free, under the first four phases of the EU ETS from 2005-2030 and excluding aviation. Source: Sandbag analysis for Carbon Brief, based on past market data and a model of the outcome of reforms. This assumes the market stability reserve (MSR) will prevent some allowances entering the market, shrinking the auction pot, while poorer member states will make full use of a derogation from auctioning, allowing them to give their power sectors free allowances. See below for more explanation of these details. Chart by Carbon Brief using Highcharts.
Phase 4 runs from 2021 to 2030 and was the subject of the latest reforms, which will have an uncertain impact on the share of carbon credits handed out for free. Sandbag’s analysis suggests that 60% of allowances entering the market could be given for free, an increase on phase 3.
This assumes three elements of the reforms kick in. First, if too many free allowances are claimed, then up to 3% of the cap can be shifted from the auction share to the free allocation share, see below. Second, poorer member states can hand their power sectors some free allowances.
Third, some allowances are likely to be removed from the market because of the market stability reserve (MSR, see below). These removals come out of the auction share, which effectively raises the share of allowances entering the market that are given out for free, even as it tightens the market overall.
Note that this analysis excludes aviation emissions. Some 15% of CO2 emissions from flights between EU nations are supposed to be subject to auction during phase 3. This share is to be maintained through phase 4.
What is the EU carbon price?
The EU ETS has also been plagued by persistently low carbon prices – for those that do have to pay for their pollution. Emissions allowances (EUAs) have cost less than €10 per tonne since late 2011, far below most estimates of the social cost of carbon and below the level thought to be necessary to drive deep decarbonisation.
Daily EU ETS carbon prices. Source: ICE EUA futures via Sandbag and Quandl. Chart by Sandbag using Highcharts.
Prices fell after the financial crisis because free allocation continued at levels based on pre-crisis economic activity, whereas industrial output contracted. Meanwhile, the spread of more efficient appliances and renewable sources of electricity cut demand for permits. This left a flooded market.
Opinion is divided on whether the latest reforms will resolve these problems and raise prices (see below).
How is the EU ETS being reformed?
The reforms agreed in November were meant to codify the rules of market operation during phase 4 of the ETS from 2021 to 2030. They ended up also aiming to correct persistently low prices, while continuing to shield industry from overseas competitors facing no carbon price and keeping eastern European states on board.
Specifically, the reforms bring the EU ETS into alignment with the EU’s overall 2030 climate target, of at least a 40% cut below 1990 levels. They update the rules on free allocation of allowances. They attempt to squeeze the market surplus, raising prices. And they extend and expand the support for energy system upgrades in eastern European countries, which has been the quid pro quo for their support of the ETS.
This uneasy balancing act saw a series of stand-offs – most prominently over support for coal power – inevitably settled by compromise. This, along with the uncertain effects of economic growth, technological change and other national and EU climate policy, means that carbon price increases – and the ETS’s role at the heart of EU climate policy – are far from assured. 나중에 이것에 대한 자세한 내용.
The EU’s topline 40%-by-2030 goal means the overall ETS cap must shrink more quickly, by 48MtCO2e each year, up from 38Mt/yr during phase 3. (This fixed annual reduction is confusingly described as a percentage “linear reduction factor” of 1.74% in phase 3 and 2.2% in phase 4. The percent refers to a proportion of the average annual cap during 2008-2012.)
What is the market stability reserve?
The other key element of the reforms is the market stability reserve (MSR), which will hold excess allowances outside the market starting from 2019. This is effectively a central bank for the carbon market, designed to stabilise supply and demand for credits, which will kick in from January 2019.
Hæge Fjellheim, head of carbon analysis for information providers Thomson Reuters Point Carbon, tells Carbon Brief:
“This reform has been going for two years. If you take it from that point in time, you would have been surprised that it was quite a strong outcome in terms of strengthening the EU ETS and the market balance, because the aim of the reform was not to tighten the balance…It’s tightening the screw on the oversupply issue, which has been the main problem of the ETS.”
The MSR was agreed in 2015, but has been strengthened in two ways. Lawmakers agreed to significantly tighten its parameters, so that it takes more credits out of circulation each year, while it will also now cancel credits if the surplus becomes large enough.
First, 24% of the market surplus will be removed each year between 2019 and 2023 and placed into the reserve, if the surplus exceeds 833m credits – enough to cover the annual emissions of the whole German economy. The reforms doubled this rate, compared to the 12% agreed in 2015, though the removal rate will revert to 12% from 2024. If the surplus falls below 400Mt, 100m credits will be released from the reserve into the market.
Second, if the number of credits in the reserve exceeds the volume auctioned in the previous year, then the excess will be automatically and permanently removed from the market. (Technically, they will be “invalidated” rather than “cancelled”; it is not clear what this distinction means, says Marcus Ferdinand, lead analyst for EU power and carbon markets at information provider ICIS Carbon Analytics.)
The automatic cancellation will remove an estimated 2.4GtCO2e of allowances from the market during phase 4, according to Thomson Reuters Point Carbon.
Can countries cancel carbon credits?
Another element of the reforms allows ETS member states to voluntarily cancel allowances from their auction share, in response to the closure of electricity generating capacity that will no longer bid into the market. Cancellations are limited to the emissions of the closing capacity.
Worker with steel forge. Credit: Cultura Creative (RF) / Alamy Stock Photo.
This could apply to UK coal-fired power stations, for example, which are closing as a result of the government’s phaseout pledge. (At the start of phase 3, the UK’s coal fleet was responsible for nearly 7% of EU ETS emissions, meaning their closure strongly affects the overall market.)
Countries could use voluntary cancellation to demonstrate greater climate ambition, says Rachel Solomon Williams, managing director of carbon market NGO Sandbag. Sweden is already voluntarily buying and cancelling ETS allowances, though only around 7MtCO2e per year.
If governments decide to voluntarily cancel carbon credits, however, they would have to forego the revenue from auctioning those allowances.
“I’m very sceptical this measure will be used on a largescale,” Ferdinand tells Carbon Brief. He adds: “I think there will always be a quarrel between the environment and finance ministries.”
Auction revenues amount to billions of euros each year across the EU, of which 80% is earmarked for climate and energy spending, research for the European Commission suggests. For example, the UK government earns around £0.5bn a year from ETS auctions – and the Office for Budget Responsibility assumes this will continue at least until the end of its forecast period in 2022/23.
(If the UK leaves the EU ETS on the March 2019 Brexit date, or after a transitional phase, then this revenue would cease. The UK’s future role in the ETS is undecided, see below.)
Nevertheless, combined with the strengthened MSR, this reform overturns the “waterbed effect”. This is the idea that climate action outside the ETS not only undermines the market, by weakening demand, but also achieves no extra emissions savings because the annual market cap is fixed. (Pushing down on one part of the “waterbed” of emissions only serves to raise them elsewhere.)
This charge has been levelled at the UK’s top-up carbon tax, the carbon price floor, for example.
Yet disagreement remains over the appropriate balance between relying on the ETS and implementing additional EU or national climate policies. (See below for more details.)
How are free allowances handed out?
During phase 4 of the EU ETS from 2021 to 2030, industries will continue to get “transitional” support in the form of free emissions permits, if they are deemed at risk of competition from overseas firms that do not pay an equivalent carbon price.
Carbon leakage: Carbon leakage is the idea that emissions-intensive industry could relocate production to another jurisdiction, to avoid paying (the same level of) carbon prices. Emissions would fall in the country where CO2 is priced but might not change on a global level, or might even increase, if overseas industry is less efficient, more coal-powered or further away, necessitating extra transport of goods. A 2014 study for the UK government says: “Empirical studies of carbon leakage in the EU ETS generally fail to find convincing evidence of substantial leakage,” even though theoretical studies suggest it should be problem.
Industry sectors at risk of this carbon leakage will – in principle – continue to get 100% of their allowances for free. Even sectors not at risk of carbon leakage will still get 30% free allowances until 2026, falling to 0% by 2030. Their free allocation had been due to stop in 2026.
A new consultation on revising the list of sectors deemed at risk runs until 2 February 2018. Phase 4 will continue using a binary at-risk/not-at-risk approach, with those at risk getting 100% free allowances, rather than a graduated approach advocated by NGO Sandbag.
In order to reduce windfall profits from excess free allowances when production falls – as happened in the wake of the financial crisis – free allocations will be adjusted up or down if an installation’s output over two years changes by more than a 10% threshold.
The power sector is not given free allowances, though phase 4 extends a partial exception to this for the 10 poorest EU member states in eastern Europe, including the likes of Poland, Romania and Hungary (see below). For the rest of industry, according to Thomson Reuters Point Carbon, the “lion’s share will continue to be considered at high risk of carbon leakage and receive 100% of their benchmark [emissions] as free allocation”.
During phase 4, the “benchmark” rate at which each industry can claim free allowances will shrink by between 0.2% and 1.6% per year, to reflect progress in improving efficiency. This benchmark rate is based on the most carbon-efficient 10% of sites within each sector.
Claims for benchmarked free allowances are added up across industries and countries, then checked against that year’s overall cap and the volume set aside for auctions, which is supposed to average 57% across phase 4. If too many free allowances are claimed, then allocations are reduced uniformly, across the board, using a “cross sectoral correction factor” (CSCF).
During phase 3, this has meant all industries, including those most at risk of carbon leakage, receiving less than 100% of their allowances for free, undermining efforts to shield them from the impact of climate policy.
Under the phase 4 reforms, up to 3 percentage points of the auction volume can be transferred into extra free allowances, in order to avoid triggering the CSCF.
This would raise the share of free allowances handed out from 43% to 46%, meaning around half a billion fewer credits available for auction, according to NGO Sandbag. This would translate into more than €3.5bn in lost auction revenues for member states, even at current low ETS prices.
How does the EU ETS support eastern Europe and innovation?
Several EU ETS support schemes will continue through phase 4. These schemes, designed to support innovation across Europe and energy sector modernisation in poorer states, come with rules attached – though the strictness of the rules is unclear. These funds were also used to leverage political support, both for ETS reforms and the wider EU 2030 climate and energy targets.
Fiat Panda and Fiat 500 production line in factory, Tychy, Poland. Credit: Bart Pro/Alamy Stock Photo.
The innovation fund, managed at EU level and funded via 400m allowances, will continue to be used to finance research and development of: “CCS or CCU [carbon capture and storage or usage] facilities, new renewable energy technologies and industrial innovation”.
For eastern Europe, two ETS schemes are supposed to assist energy system upgrades, under articles 10c and 10d of the directive.
When the power sector stopped receiving free allowances in 2013, poorer EU countries were allowed to continue handing out credits, covering up to 70% of emissions in 2013, declining to zero in 2020. This “article 10c” derogation was conditional on the 10 countries – Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Lithuania, Poland and Romania – investing the equivalent amount in “the modernisation of electricity generation”.
These countries must submit national plans explaining what the money was going towards. Specifically, the plans should address: “Investments in retrofitting and upgrading of the infrastructure and clean technologies. The national plan shall also provide for the diversification of their energy mix and sources of supply.”
The European Commission approved allocation of up to 680m free allowances under 10c by 2019, with a market value estimated at €12bn, according to NGO Carbon Market Watch. It says that in practice, 90% of the money was invested in existing fossil fuel infrastructure, mostly coal.
Can EU ETS funds still be used to support coal?
The article 10c derogation was extended and expanded under the phase 4 reforms, allowing those 10 eastern European countries to allocate up to 60% of power sector emissions allowances for free, with their value matched by investment as before.
This 60% figure is an increase from the 40% agreed by member state governments in 2014. While the revised legal text includes a series of new conditions, these leave considerable wiggle room. (The European Parliament had called for a 450gCO2 per kilowatt hour threshold for support, effectively an outright ban on support for coal power.)
The text says: “The investments supported shall be consistent with the transition to a safe and sustainable low-carbon economy, the objectives of the Union’s 2030 climate and energy policy framework, and reaching the long term objectives as expressed in the Paris Agreement. This derogation shall end on 31 December 2030.”
Investments financed through article 10c – and worth more than €12.5m – must be subject to competitive bidding. Additionally, they must: “contribute to the diversification of their energy mix and sources of supply, the necessary restructuring, environmental upgrading and retrofitting of the infrastructure, or modernisation of the energy production.”
Further loosely worded conditions say projects must “not contribute to or improve the financial viability of highly emission-intensive electricity generation nor increase dependency on emission-intensive fossil fuels”.
Funding must also “realise a predetermined significant level of CO2 reductions”. Where new power capacity is added, this must be matched by the closure of “a corresponding amount of more emission-intensive…capacity”.
The second EU ETS scheme for eastern Europe is the article 10d “modernisation fund”, offered in 2014 in return for Polish support of the EU 2030 climate goals. This is administered at EU level and financed with 2% of total allowances for the period 2021-2030 (310Mt), with an optional extra 0.5%.
The revised text says: “No support from this fund shall be provided to energy generation facilities using solid fossil fuels,” ruling out EU money for coal. The text adds that 70% shall go towards renewables, energy efficiency, grid infrastructure or support for “just transition” in mining regions.
The net impact of the reforms to these two support schemes for eastern Europe is uncertain. This will be a balance between the raising of the 10c derogation to 60% free allocation, its new but loosely-worded funding criteria and the ban on support for coal under the 10d modernisation fund.
Fjellheim tells Carbon Brief:
“We want to look into this a bit more, because what does it really mean? It looks like a big win for those that didn’t want to fund coal, but with the raised ceiling to 60%, it is not really clear…It looks strict but it might not be that strict in the end.”
Will the latest reforms raise carbon prices?
Most analysts expect the reforms to tighten the market surplus and raise carbon prices in the short term, from today’s roughly €7/tCO2e to around €10 through 2018, reports newswire Carbon Pulse.
In terms of future carbon prices, the strengthened MSR is the most important aspect of the reforms, says Ferdinand. He tells Carbon Brief: “Honestly, I’m quite bullish. The main driver is the MSR doubling [of the annual intake rate, from 12 to 24% of the market surplus].”
Ferdinand thinks the MSR will cut the volume of allowances available for auction roughly in half from 2019, a cut of around 400MtCO2e. He also expects rising prices to change participants’ strategic approach to hedging, encouraging them to hold on to unused credits and squeezing the surplus available to the market.
He says: “If you are an industrial sitting on surplus allowances when the price is rising, we don’t believe all of those will come to market.”
All this means prices could rise to €9-10/tCO2e in 2018 and €36 in 2024, Ferdinand says, before easing off towards €23 in 2030, as the MSR intake rate drops back to 12% per year and after higher prices have driven faster-than-expected cuts in emissions.
At the lower end of the forecast spectrum is Thomson Reuters Point Carbon, which sees prices rising to €10 in 2020 and €23 in 2023. Fjellheim explains: “We think the MSR will tighten the market considerably, but we assume market participants to be forward looking…so that means they price in future shortages already today.” This means prices will only rise gradually.
Fjellheim tells Carbon Brief:
“We have lower prices than many other analysts…There is more risk to the down side than the upside, if you look at related policies like coal phaseout.”
This highlights a central problem for the EU ETS. The phase 4 reforms tackle only one side of the supply-demand balance, by attempting to reduce the number of surplus allowances on the market. Yet the other half of this equation – demand for emissions credits – is also affected by related climate policy, as well as unrelated market forces.
Reflecting this uncertainty, analysts set out a wide range of ETS price predictions at a September 2017 conference organised by specialist newswire Carbon Pulse. It reported that analysts MKonline forecast a €14 peak, due to weak demand as emissions cuts are made for other reasons.
Meanwhile, consultancy Energy Aspects sees a gradual rise to €38 by 2030, interrupted in the mid-2020s by tighter air pollution limits under the EU Industrial Emissions Directive, which force the closure of coal plants burning dirtier lignite fuel.
Emissions – and, therefore, market demand under the EU ETS – have been falling rapidly, according to analysis from Sandbag. It says emissions fell by 2.9% on average between 2005 and 2010, then by 2.6% on average through 2016.
If emissions reductions continue at a similar rate through the 2020s, Sandbag analysis suggests, then the size of the ETS market surplus – currently around 1.7bn allowances – would remain the same until 2030, despite the impact of the phase 4 reforms and the tightened MSR.
Sandbag’s Soloman Williams tells Carbon Brief:
“We can’t see [the reforms] having a massive impact on the carbon price. We still think there will be a relatively low price by 2030, simply because there will be no scarcity [of allowances]. Scarcity drives prices.”
It’s worth adding that analysts’ forecasts have tended to overestimate prices on carbon markets.
What is the best way to strengthen carbon markets?
Views diverge on the appropriate response to the interaction between the EU ETS and other climate policies, sometimes referred to as “overlapping” action.
One solution is simply to avoid raising the ambition of other policies, such as national coal phaseouts or moves to raise the EU’s 2030 targets for renewables and energy efficiency. Yet these other actions are, by their very nature, decided by a wide range of actors and so hard to control.
Fjellheim tells Carbon Brief:
“Countries that want higher carbon prices are also more eager to put in place national policies that would work in the other way, going above and beyond their EU targets. I definitely see a risk that countries will continue to move forward on overlapping policies – at least a risk to the carbon price and the ETS as the main instrument of climate policy…There will always be national aims, policies and electorates so it’s naive to think of the ETS as the only instrument of climate policy.”
Does the EU ETS need a floor price?
Another solution is to underpin the ETS with a minimum “floor price” for carbon emissions, a move pushed by French president Emmanuel Macron in September.
French presidential candidate Emmanuel Macron visits a Deutsche Bahn training programme for young refugees in Berlin, Germany, 10/01/2017. Photo: Soeren Stache/dpa/Alamy Stock Photo.
The Netherlands has pledged to join the UK in setting its own carbon price floor from next year. It will also join Sweden in buying and cancelling allowances. Meanwhile Belgium is also looking at setting a minimum carbon price.
Support for the idea comes in a November 2017 paper published by the Mercator Research Institute on Global Commons and Climate Change (MCC), which says: “The EU ETS is in crisis.” Its authors include prominent climate economist Prof Ottmar Edenhofer.
The paper argues:
“Introducing a carbon price floor can re-affirm the role of the EU ETS as the central pillar in the European effort towards decarbonisation. Such a price floor should start at an economically significant level and rise over time…Many observers argue that it is misguided to focus on the EU ETS allowance (EUA) price, since the emissions cap determines environmental effectiveness and the allowance market works well in technical terms.”
The paper lists a range of arguments against this view, including that the market operates inefficiently due to “private sector short-sightedness and regulatory uncertainty” and that national climate measures dampen the EU carbon price.
“The recent EU ETS reform effort offers an entry point to tackle these concerns, but does not sufficiently address the underlying problems. The magnitude and direction of its impact on the EUA price is highly uncertain. More fundamental change will be required to reaffirm the role of the EU ETS as the central pillar of European decarbonisation efforts.”
[Consultancy Futureproof has an incredibly detailed discussion of the technical and interpretational issues that create ambiguity around the EU ETS and the EU’s overall climate goals.]
Can the EU ETS be changed again?
Arguments over the strength of the EU ETS will continue to play out over the years ahead, with the phase 4 reforms making explicit provision for the rules to be regularly reviewed.
The text says: “The provisions of this directive should be kept under review in the light of international developments and efforts undertaken to achieve the long-term objectives of the Paris Agreement.”
“If there’s political will, [politicians] could still tighten the screw,” says Fjellheim.
The reviews are aligned to the five-yearly timetable of global stocktakes under the Paris deal. This will include an early review of the ETS reforms in the context of the 2018 “Talanoa Dialogue”, which will take stock of progress via three questions (“Where are we? Where do we want to go? How do we get there?”), in order to inform the next round of international Paris climate pledges.
This 2018 review is probably too early to make changes to the ETS, says ICIS’s Ferdinand, given reforms have only just been agreed. Further changes are more likely around the 2023 Paris Agreement stocktake, he suggests.
These regular reviews “may consider whether it is appropriate to complement [the ETS]…with carbon border adjustments”, the introductory reform text says. The parameters of the MSR will also be subject to review, in 2021.
Separately, a 2020 review of the planned international aviation emissions trading scheme, known as CORSIA, will inform a decision on continued exemption of extra-EU flights from the ETS.
The ETS reform text also says: “Action from the International Maritime Organization or the EU should start from 2023.” It requests annual reports from the commission to track progress.
What about Brexit?
One final complication for the EU ETS is the UK’s planned EU exit on 29 March 2019, which falls before the April 2019 ETS compliance deadline for emissions in 2018. In response to this looming deadline, the European Commission proposed a “safeguarding” rule to invalidate UK carbon allowances issued from 1 January 2018, worth around €1bn to government and industry.
The thinking was that if the UK left the ETS in 2019, without a transitional or final deal on the future relationship, then holders of UK industry would no longer need its allowances and could flood the market, sending carbon prices plunging.
After several rounds of furious diplomacy, EU nations recently agreed to a revised safeguarding rule that aims to avoid the writing off of those €1bn in allowances while shielding the EU ETS from market disruption. This agreement is contingent on a rule-change that will bring forward the compliance deadline for UK firms. In a consultation on making this change, the UK government says:
“To ensure a smooth transition and avoid a cliff edge on withdrawal, the UK has proposed to the EU an implementation period of about two years where we would continue to have access to each other’s markets on current terms. We are calling for this to be agreed as early as possible to provide clarity.”
Ferdinand tells Carbon Brief: “A transition period would postpone the cliff edge, but the difficulty would still be there. But you could be much better prepared.”
As to what happens to the UK’s participation in the EU ETS after Brexit and any transition period, the UK government has been making holding statements that keep all options open. On 20 November, for example, climate minister Claire Perry told parliament:
“The government is considering all options for the UK’s future participation, or otherwise, in the EU Emissions Trading System after our exit from the EU. The effect on the cost of EU allowances will depend on the nature of the UK’s future relationship with the system and will be taken into account as part of this consideration.”
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Low Allowance Prices in the EU Emissions Trading System: New Research on an Evolving Program.
The EU Emissions Trading System (ETS) for carbon dioxide (CO2) is the largest worldwide. Since its inception in 2005, it has experienced allowance price volatility and low overall prices. Generally, the fact that it costs less than anticipated to reduce CO2 emissions would be good news. Instead, these price dynamics are bad news for many because they suggest the program may fail to spark a significant transformation of the economy away from fossil fuel use.
To bolster allowance prices, EU authorities are taking steps to introduce a market stability reserve (MSR). The MSR regulates the volume of allowances issued at any point in time depending on the volume in circulation and not yet used for compliance. Importantly, the MSR varies when allowances are issued but it does not vary the total number.
How this remedy will work and whether it will affect market prices are the focus of new research by three teams commissioned by RFF to provide an analysis of the EU’s MSR proposal.* Their findings are now available in the following RFF discussion papers and accompany related research by European-based teams. Read on below for highlights of key points:
What have we learned? The news, in my view, is mixed. Theory and some evidence suggest that, so far, the MSR will have a limited effect in fixing the problem directly. However, to the credit of EU regulators, the MSR signals that the doctor has not given up on the patient. The European Union has a long-term commitment to emissions trading—the MSR may buy enough time for prices in the ETS to recover as the economy recovers. If that does not happen, I believe the European Union may ultimately replace the MSR with a more direct and simpler instrument—a reserve price in auctions for emissions allowances that will instill a minimum price in the market.
Why Do We Observe Low Allowance Prices?
The EU has identified ambitious climate goals in the long run. Model forecasts suggest these goals will require high allowance prices that should be reflected at a discount in today’s prices. However, the allowance prices today are a concern because they do not appear sufficient to trigger the innovation and investment that will be necessary to achieve the long run goals.
It is important to understand the cause of the problem in order to design an effective remedy. But, there does not appear to be a single explanation for the low demand for emissions allowances and the resulting low allowance prices. One cause might be the economic slowdown in Europe, which has reduced the demand for emissions allowances. Another is overlapping policies by EU member states to promote renewable energy and energy efficiency, which also reduces the demand for emissions allowances.
One group of authors has argued that low prices result because the current supply of allowances exceeds the demand of the electricity industry to hedge emissions associated with existing power contracts going out three to four years. When the demand of the electricity sector is satisfied, allowance prices fall. In this view, moderating the short-run availability of allowances by adjusting their flow through the MSR will affect the near-term price without having to change the volume of allowances that are issued in the long run, a point that has been criticized by others.
In one of the new RFF papers mentioned above, RFF Visiting Fellow Steve Salant explores whether the limited demand to hedge power contracts explains low allowance prices and the observed jumps in those prices. In the current market environment, investors outside the electricity sector should be buying low to be able to sell high in the long term, when allowances are expected to be scarce. Such behavior would drive up short-term prices—but this has not occurred. Salant suggests one reason may be that investors are uncertain about the survival of the program in the long run and hence require a premium to compensate for that risk. Changes in this “regulatory risk” might also explain the jumps in allowance prices that have occurred. If regulatory risk is the problem, the MSR would help boost allowance prices only if it were to change investors’ expectations. The European Union’s commitment to the trading program, as reflected in the MSR debate, may provide such a signal. Paradoxically, however, the MSR may reinforce uncertainty to the degree that it signals that market outcomes will depend on additional future administrative action.
In another of the new RFF papers, Harrison Fell of the Colorado School of Mines uses simulation modeling to illustrate how arbitrage across time relates prices in the present to prices in the future. One would expect economic agents to adjust the timing of buying and selling allowances based on the path of prices over time—and, in turn, prices to adjust to that behavior. Fell finds that the MSR can reduce price volatility—but that its performance is especially sensitive to underlying economic parameters.
Charles Holt and William Shobe, of the University of Virginia, round out our analysis. They examine market behavior in an experimental setting, finding that subjects in the laboratory do a good job of arbitraging across time periods. And so compared to a policy of doing nothing, they find little benefit (and possible cost) associated with adjusting the quantity of allowances based on privately held inventories of unused allowances, such as would be the case with the MSR. However, their research indicates that a “price collar” (when a price floor and a price ceiling are both in effect) may enhance the efficiency of the program.
The Challenge of Managing Carbon Prices.
The analyses indicate that if the reason for low allowance prices has to do with satiation of demand to hedge power contracts and if other investors require a premium, the MSR may be effective in bolstering prices in the near term. But if other factors contribute in an important way to interact with the program and depress prices, different remedies may be necessary.
Whatever the cause, the low price of allowances is perceived as a negative feature of the EU ETS. Another remedy that I’ve written about previously is a reserve (minimum) price in the auction for emissions allowances. All three North American programs—in California, Quebec, and the Regional Greenhouse Gas Initiative (RGGI) in the Northeast United States—include this feature. The design looks just like the minimum acceptable bid option that one finds on eBay. Bids for emissions allowances below the reserve price in an auction are not filled. If sufficient demand does not exist above the reserve price, some allowances are not sold, restricting supply and helping to stabilize the price.
These allowances may be available in a subsequent auction but ultimately should be withdrawn. For example, in RGGI, the backlog of unsold allowances was permanently retired. In each North American program, the reserve price has been binding for at least one auction—and in every instance, the price has subsequently moved off the implied price floor. And so these market-based programs have continued to function. Without such a mechanism, however, allowance prices may have fallen to zero, spelling a program’s demise. We saw near-zero prices in the trial phase of the European Union’s program in 2007.
For the EU ETS today, an auction reserve price was only briefly considered to remedy the issue of low allowance prices. Instead, policymakers in the European Union have opted to introduce the MSR—a somewhat complicated rule to modify the timing for introducing emissions allowances into circulation. It will be interesting to see if this approach achieves its desired effect. Meanwhile, the option of a reserve price is an idea that may still gain appeal for its simplicity. Its time may yet come.
*This work was coordinated with DIW Berlin, a leading economic research institute in Germany. Funding was provided by Mistra Indigo, DIW Berlin, and RFF’s Center for Energy and Climate Economics.