Brussels, 03/04/2012 (Agence Europe) - All tribute to the recession and the mild winter. The CO2 emissions of some 10,000 industrial installations covered by the EU's emissions trading system (ETS) were down 2.6% last year (1.88 billion tonnes compared to 1.94 billion tonnes the previous year), according to the comparable verified data initially published by the European Commission on Monday 2 April. But it would be a mistake to see this drop, recorded this year for the third year in succession, as being attributable to the virtuous effects of the ETS; quite the contrary. It signifies that businesses have emitted 114 million tonnes less than provided for by the ETS upper limit and that the ETS therefore allows them to roll over 155 million in quotas to the following period, by increasing their surpluses, stressed the WWF, which has made its own calculations.
According to the NGO, the fact that the market was oversupplied with quota is further proof that the ETS, the main market instrument to fight climate change, is not working properly and has caused a drop in carbon prices (-14% on 2 April), which will damage the effective reduction of CO2 emissions.
“WWF warns of imminent malfunctioning of the European Emissions Trading System. The 2011 ETS data show a continued oversupply of emission allowances, leading to underperformance of what many label to be the 'flagship' policy instrument for reducing industrial greenhouse gas emissions in the EU”, said Jason Anderson, Head of European Climate and Energy Policy at the European branch of the NGO. The WWF is firmly convinced that the ETS urgently needs to be improved in order to restore confidence in the instrument and avoid a further collapse of the carbon price. “This should be done by withholding a significant amount of emission allowances in the short term, in the context of the Energy Efficiency Directive” (see EUROPE 10575), he said. Whereas the EU had assumed a rate of €30 a tonne when the Energy legislative package was approved in 2008, the carbon price fell on Monday from €7 to its record low of €6.14. With quota reserves in place, there is no need for any net reduction of emissions between now and 2020, unless the reform of the ETS requested by the Parliament in the compromise recently negotiated between the environment committee and the ITRE committee is carried out (see EUROPE 10564). (AN/transl.fl)