Fortum's views on the ETS reform post-2020

23 September 2015, 14:51 EEST

The European Commission's proposal on the amendment of the Emissions Trading Directive is important in revitalising the functioning of the Emissions Trading System (ETS).

The debate on the reform of the EU Emissions Trading System (ETS) is being started in the European Council and the European Parliament in the autumn. This revision concerns the next trading period starting in 2021.

Fortum welcomes the Commission's proposal (15 July 2015) on the amendment of the Emissions Trading Directive and considers it as an important element to implement the 2030 greenhouse gas reduction target and as a natural continuum to the Backloading and Market Stability Reserve (MSR) decisions to revitalise the functioning of the Emissions Trading System (ETS).

Fortum has been advocating for a strong ETS as the most cost-effective, technology-neutral and flexible tool for mitigating climate change. A robust and trustworthy ETS can reduce the risk of increasing national and divergent climate policies and can reduce the need for subsidies for electricity production. In Fortum's opinion, ETS is the best tool for providing affordable, reliable and sustainable energy to the EU economy.

Long-term stability and clarity of the climate policy is vital for the energy sector's efforts to decarbonise the energy system and to contribute to emissions reductions in other sectors too. An early decision on the ETS revision is therefore an important step in creating a stable and predictable framework for the post-2020 period.

In Fortum's view, the proposal is mainly constructive and we expect it to reinforce the carbon market. Free allocation will be more targeted and more dynamic and, consequently, will hopefully reduce over-allocation in some industrial sectors. However, we do raise a couple of issues that need further elaboration during the revision  process of the directive.

Read Fortum's comment paper by clicking the link below.

Futher information:
Kari Kankaanpää, Senior Manager Climate Affairs, +358 50 4532330, kari [dot] t [dot] kankaanpaa [at] fortum [dot] com