PRESS RELEASE 9 October 2012
”European electricity companies have committed to an ambitious target to reduce carbon dioxide emissions, but the uncertainty of the regulatory environment is hampering progress in the desired direction. Long-term investments in low-emissions energy production require decision-makers to set a clear vision for long-term goals and a predictable policy. Unfortunately, this is not the reality,” remarked Anne Brunila, Executive Vice President, Corporate Relations and Strategy, Fortum, at an electricity market seminar in Helsinki, Finland.
”An investment survey of European electricity companies indicates that the strengthening of political risk in particular is considered the biggest obstacle to investments. New subsidy schemes are continuously being introduced, existing ones are being modified, and the tax burden for the energy sector is being increased – partly in ways that is not in line with energy and climate policies.
”Even though we are building a common EU energy market, a national perspective is strongly influencing decision-making. However, Finland is part of the European entity, and that must be taken into consideration when planning national strategies and policy measures. As in economic policy, market integration should lead to common operating principles and systems also in energy policy. This would improve cost efficiency and transparency, and it would avoid a subsidiary race between member states,” she pointed out.
”Market-driven mechanisms, like emissions trading, are more efficient than subsidies tailored to specific cases because they target investments in areas where they can be implemented at the lowest cost to society. A functioning emissions trading scheme would create genuine market pull for investments and for the deployment of new technologies, which the Finnish Government is striving for in its planned Clean Energy Programme. In this economic situation, I am very concerned with development in which an increasingly larger share of new investments in energy production rely on public subsidies.
”Even though emissions trading has functioned technically, its steering effect has deteriorated as a result of the weak economic situation and, in particular, the overlapping steering mechanisms. To restore the effectiveness of emissions trading, it is necessary to implement the one-time corrective actions suggested by the Commission. Long-term effectiveness can be improved by quickly agreeing on sufficiently ambitious CO2 emissions reduction target for 2030. I hope that Finland will take a strong role in making this decision a reality. Studies show that the current target will not get us even close to the emissions reduction of 80-95% by 2050 set by the Heads of States,” Brunila notes.
Anne Brunila, Executive Vice President, Corporate Relations and Strategy, Fortum,
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