The energy industry has taken a proactive approach to climate change mitigation and is committed to becoming virtually decarbonised by 2050. In order to reach this target at the lowest cost for society, some key players in the sector have jointly established initiatives to promote a market-driven climate and energy policy framework. Fortum is actively involved in these efforts and has recently joined several business initiatives.
For Fortum, participation in these initiatives provides globally recognised forums to promote business solutions to climate change mitigation and strengthened forces to promote market-based climate policies and carbon pricing and markets as a driver for investments in a low-carbon economy. These initiatives also give us global visibility as a sustainable and responsible energy company.
2030 Single Target Initiative
Fortum is a member in a coalition of eight energy companies that advocate the single CO2 target approach in the EU 2030 energy and climate policy framework. The key message of this coalition is that a single binding target for greenhouse gas reduction, combined with a structural reform of the EU emissions trading scheme (ETS) and a progressive policy for renewables through an intensified R&D and innovation policy instead of a separate renewable energy target, would offer the most cost-efficient way for Europe to reach its 2050 decarbonisation objective. Whereas the design of the 2020 energy and climate policy was to some extent based on a vision without reality, the follow-up framework should be based more on reality, properly addressing the existing shortcomings in the implementation of the 2020 framework, such as increasing end-user energy prices, energy market distortions and the weak steering effect of ETS.
The companies involved in this initiative represent the whole energy value chain: utilities, energy-intensive upstream and technology industry. The key target of the joint lobbying is the high-level Commission officials at the Cabinet level.
12 CEOs’ Initiative
Fortum is the latest European energy utility to join the originally 8 but now 12 CEOs’ initiative for better energy policy for Europe. This initiative was launched in late May 2013 with the target to influence the design of the EU 2030 energy and climate policy also in the short term. This exceptionally high-level initiative is based on a commonly shared diagnosis of the failures of the current policy as well as identification of a concrete ten-point action plan on measures that are needed both before and after the decisions on the EU 2030 energy and climate policy framework. The action plan identifies recommendations for the European Commission, Member States and energy companies, with the aim to improve energy market functioning and the investment environment for low-carbon energy investments as well as security of supply.
The requirements of the CEOs focus on developing a new energy-market design that properly addresses the security of supply challenges created by increasing intermittent renewable energy and on enforcing the ETS as the main steering instrument for low-carbon investments. The CEOs are calling for a European market-based approach instead of divergent national solutions and ask member states to refrain from national policy interventions that increase the political risks and deteriorate the investment climate.
The CEOs are organising joint meetings with Commissioners, heads of EU Member States and ministers.
Caring for Climate
Caring for Climate (C4C) is the initiative of the UN Global Compact, the UN Environment Programme and the secretariat of the UN Framework Convention on Climate Change and is aimed at advancing the role of business in addressing climate change. C4C endeavours to help prevent a climate change crisis by mobilising a critical mass of business leaders to implement and recommend climate change solutions and policies. The initiative helps companies to advance practical solutions, share experiences, and shape public policy and public attitudes. The supporters of the Caring for Climate Statement are prepared to set goals, develop and expand strategies and practices, and publicly disclose emissions as part of their existing disclosure commitment within the Global Compact framework.
C4C is endorsed by about 350 companies from 65 countries. Over the past several years, leaders among C4C signatories have demonstrated remarkable progress in pursuing comprehensive long-term strategies on energy efficiency and innovative low-carbon technologies within their processes, products and services throughout their value chains.
Sustainability Manager, Climate and Environmental Affairs