European Energy Crisis Fuels Carbon Trading Expansion Concerns
(Bloomberg) -- Several European Union member states expressed deep reservations about the bloc’s plans to expand carbon trading, fearful that it might boost energy costs for consumers.
During the first official debate on the EU’s landmark climate proposals unveiled in July, environment ministers from France, Cyprus, Romania, Malta and Slovakia were among those casting doubts on proposals to create a new Emissions Trading System for heating and road transport. Hungary’s representative said the new ETS would cause “serious damage,” even with a 72 billion-euro ($83 billion) social climate fund cushioning the impact on the most vulnerable.
“The creation of new carbon market does give rise for a lot of concern,” Barbara Pompili, France’s ecological transition minister, said at the Environment Council debate in Luxembourg. “There is risk that energy prices will rise without any clear impact on carbon emissions.”
Germany was one of the few states to express support for the separate ETS as soaring energy prices across Europe threaten to undermine the EU’s efforts to become carbon neutral by 2050. The existing ETS, which has been widely credited for cutting greenhouse gas emissions since it was introduced in 2005, covers manufacturers, power producers and airlines.
Earlier Wednesday, EU climate chief Frans Timmermans reiterated that record carbon price increases, which some member states blame for contributing to the energy crisis, were responsible for no more than a fifth of the recent surge in electricity. The EU is set to outline next week what measures members can take to combat the price spike, without undermining the bloc’s rules.
EU carbon futures for December were at 60 euros Wednesday, more than double the level last year. Cyprus called on the European Commission to come up with alternative measures before creating the separate ETS and said more needed to be done to gauge the price impact.
“We would like to express concerns to expanding the ETS into new sectors, given problems we are already facing with energy poverty,” said Andreas Gregoriou, the nation’s agriculture and environment minister.
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