Fortum: The ETS requires an allowance supply adjustment mechanism

PRESS RELEASE 25 June 2013

Both immediate actions and longer-term adjustments are required to allow better
functioning of the European carbon market and the emissions trading scheme,
ETS. Early July, the European Parliament should approve the backloading
proposal in order to postpone 900 million allowances from entering the market.
This should be followed by a structural reform of the ETS, where an allowance
supply adjustment mechanism should be introduced.

In the current EU ETS set-up the supply of allowances is inflexible and does
not react to demand or any other developments. An allowance supply adjustment
mechanism, ASAM, would automatically, based on pre-determined rules, adjust the
supply of allowances in cases of significant deviations in the economic
development. According to a recent study by the consulting company Pöyry on
Fortum's assignment, ASAM's benefit is, in particular, that it does not require
separate political interventions. In addition to adopting ASAM, the European
carbon market must be strengthened by setting a demanding CO2 target for 2030
as soon as possible.

"The ETS must deliver a clear carbon price signal for the huge investments
needed for decarbonisation of the society. We welcomed the favourable voting
result in the ENVI Committee on backloading last week and encourage the Members
of the Parliament to vote in favour of the legislation in the upcoming
plenary," urged Markus Rauramo, Fortum's CFO at the European Business Leaders'
debate in the European Parliament on 25 June 2013.

Fortum is highly committed to climate change mitigation and supports emissions
trading as the main climate policy instrument in Europe. Emissions trading
promotes the competitiveness of low-carbon energy production and technologies,
while enabling climate goals to be reached at the lowest cost. The Commission
has proposed the backloading of 900 million allowances to be auctioned in
2013-2015 until 2019-2020.

Fortum Corporation
Corporate Communication

Further information:
Esa Hyvärinen, Vice President, Corporate Relations, Fortum,

tel. +358 40 82 62646
Johan Linnarsson, Advisor, Long-Term Market Analysis, Fortum,

tel. +46 70 99 55884

Fortum
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