In order to speed up decarbonisation of the energy sector, it is necessary to have a carbon floor price in the electricity sector, as a first stage, say all those taking part at the conference on a “carbon floor price in Europe”, in Brussels on Monday 5 March. The event, organised at the initiative of France, brought together a total of around 60 ministers and representatives of think-tanks, Eurelectric, and the Greens/EFA group at the European Parliament.
The aim of the conference, which was opened by the secretary of state for ecological and inclusive transition, Brune Poirson, was to use to advantage the experience gained by a group of countries that have already worked on a floor price to reflect and coordinate with a view to launching discussion, at European level, on carbon tariffs and improvement to the “price signal”.
The conference marked the launch of a common initiative by five member states – Germany, France, Finland, the United Kingdom, Sweden and the Netherlands – to launch informal reflection on strengthening the carbon signal price.
The EU emissions trading system (ETS) was recently reformed for the period 2021-2030 in order to bring up the price of carbon per tonne, as it had already fallen to under €7. It currently stands at about €10 (compared with €30 as initially envisaged). This, however, is not enough: as everyone has said.
A floor price to complete ETS. As a complement to ETS, a floor price for the production of electricity in Europe would make it possible to rapidly reduce EU emissions in this sector of activity, given that electricity production accounts for 20% of total greenhouse gas emissions in the EU.
Brune Poirson said: “We are faced with a dual challenge: emissions are still too high in some sectors and prices are often too low to accelerate the low-carbon energy transition”.
France is keen on “a coordinated approach among a coalition of voluntary member states” in order to “create a mechanism that guarantees a €25-30 price per tonne of CO2” to “transform the priorities of investors” - without having to wait until “2025, or even 2030”.
“We all know that ETS does not work. We did not wait for the rise in carbon prices to come about on its own. We intervened. We have shown political resolve. But the ETS only covers a small part of CO2 emissions”, commented the Finnish minister for the environment, energy and housing, Kimmo Tillikainen.
Eurelectric General Secretary Kristian Ruby thinks along the same lines. “We need a coherent framework so that our companies can invest”, he says. He went on to call for electrification of transport, so that all emissions are covered by ETS.
“The floor price can be a provisional solution until ETS becomes effective”, said Laurence Tubiana, formerly French ambassador for COP21 climate talks and currently president of the European Climate Foundation, who chaired the debate.
“A strong signal price is needed if we want to comply with the Paris Agreement”, said the deputy secretary of state for the environment of the United Kingdom, Theresa Coffey, who called for a tax on fossil fuels and for coordination of the carbon price policy, despite Brexit.
A representative of the Sandbag think-tank presented the floor price virtuous circle and praised the case of the United Kingdom, a country where CO2 emissions linked to coal have fallen 84% since the introduction of a carbon floor price.
Swedish Secretary of State Eva Svedling, for her part, stressed that 2020 will bring an opportunity to review ambitions upwards. She highlighted the importance of additional measures.
Germany’s Director General for Climate Policy Karsten Sach commented that “in the current context, a floor price would be more to France’s advantage than to Germany’s, given that Germany has decided to turn away from nuclear energy and, for the time being, is dependent upon coal”. (Original version in French by Aminata Niang and Mathieu Solal, trainee)