28 Feb (NucNet): Brussels-based nuclear industry group Foratom has welcomed reforms to the EU Emissions Trading System (ETS) for its next phase from 2021 to 2030, but said more should be done if the EU wants to restore confidence in the system as its main method of decarbonising the economy in an affordable way.
Member states approved on 27 February 2018 a reform deal for the ETS – which hopes to help the bloc cut emissions by 40% by 2030 – after MEPs gave their approval earlier this month.
The ETS is the EU’s flagship emissions reduction tool and EU leaders hope revisions to the scheme will help the bloc meet its target of cutting greenhouse gas emissions under its Paris Agreement commitment.
An overall cap on the total volume of emissions, known as the linear reduction factor (LRF), will be reduced annually by 2.2%. Foratom, which represents almost 800 companies in the civilian nuclear sector, said it would have liked to see the cap reduced at an annual rate of 2.4% from 2021 onwards.
The reforms also tackle the prospect of industries relocating outside the jurisdiction of the ETS, or carbon leakage, through a comprehensive revision of free allocation rules.
Foratom said the reforms strengthen the functioning of the system and are “a step in the right direction”, but may not be enough to boost the development of all low-carbon technologies in the EU or fully align the system with the conclusions of the Paris Agreement.
Foratom director-general Yves Desbazeille said: “The ETS should be spearheading the switch from fossil fuels to low-carbon energy sources, including nuclear energy. If the necessary investments are to be incentivised, the carbon price needs to increase significantly, starting now. Without it, the EU will fall short of fulfilling its climate goals.”
Improvements to the system also include measures to reduce the number of emission permits issued and increase the trading price of carbon. To that end, the deal doubles the rate at which the ETS’s Market Stability Reserve (MSR) soaks up excess allowances.
The ETS has struggled to push up the price of carbon since it was launched in 2005. A higher carbon price means that industries will be more likely to invest in emissions reduction technologies rather than just paying to pollute, the EU said.
Since the ETS negotiations were brought to a close in November, the price of carbon has increased 25% and is trading at just under €10 a tonne, or near a six-year high. But critics say the price is too low and a figure around the €30 mark is needed to really unlock the potential of carbon market trading.
