Press release

Three Nordic utilities call for action to strengthen the EU carbon market

20 May 2016, 9:00 EEST


The three largest Nordic utilities Fortum, Statkraft and Vattenfall, propose

improvements of the EU carbon market to better reflect the high ambitions of
the Paris Agreement. In their joint position signed by the CEOs of the
companies, they call for three immediate actions to be incorporated in the
ongoing revision of the EU ETS Directive for Phase 4.

The Paris Agreement established an international long-term political framework
for the global transition towards low-carbon economies. The EU carbon market
(ETS) was established as the EU’s main climate policy instrument. However, the
carbon market does currently not reflect the long term ambition of the Paris
agreement. Moreover, the ETS does not provide sufficient incentives for low
carbon investments in the energy sector.

It is important that the EU climate policy is adjusted to better reflect the
intention of the Paris Agreement. Therefore, the EU carbon market must be
strengthened now as the EU’s core instrument. To this end, the three Nordic
utilities propose three immediate actions:

- To raise the ambition of the ETS-scheme by increasing the linear reduction
factor (LRF) of the ETS to at least 2.6% from 2021.
- To reduce the supply of ETS allowances according to the impact of national
overlapping policies.
- Not to sell allowances from the Innovation Fund before 2023 in order to
minimize market distortion.

Fortum, Statkraft and Vattenfall are strongly committed to making EU power
generation CO2-neutral by 2050 at the latest. The earlier the EU ETS is
adjusted to reflect the long term EU climate goals, the lower the overall
societal costs for reaching the long-term climate target will be, and the more
predictability the EU ETS operators and investors will have.

Fortum Corporation
Corporate Communications

Further information:

Fortum: Kari Kankaanpää, Senior Manager Climate Affairs, +358 50 4532330, kari [dot] t [dot] kankaanpaa [at] fortum [dot] com (kari[dot]t[dot]kankaanpaa[at]fortum[dot]com)
Statkraft: Knut Fjerdingstad, Press Spokes Person, +47 90186310, knut [dot] fjerdingstad [at] statkraft [dot] com (knut[dot]fjerdingstad[at]statkraft[dot]com) 
Vattenfall: Robert Pletzin, Media Relations Manager EU and Corporate +46 72 516 86 06, robert [dot] pletzin [at] vattenfall [dot] com (robert[dot]pletzin[at]vattenfall[dot]com) 

Our companies represent around 305 TWh of power and around 57 TWh of heat
production with an aggregated turnover totalling EUR 25 billion per year

Fortum’s vision is to be the forerunner in clean energy. We provide our
customers with electricity, heat and cooling as well as other energy solutions
that improve present and future life. Already 64% of our electricity generation
is CO2 free. Our main markets are the Nordic and the Baltic countries, Russia,
Poland and India. In 2015, we employed some 8,000 energy sector professionals,
and our sales were EUR 3.5 billion. Fortum’s share is listed on Nasdaq

Statkraft AS
Statkraft is a leading company in hydropower internationally and Europe’s
largest generator of renewable energy. The Group produces hydropower, wind
power, gas-fired power and district heating and is a global player in energy
market operations. Statkraft has 4200 employees in more than 20 countries.

Vattenfall AB
Vattenfall is active in all parts of the energy value chain: from electricity
and heat production to distribution, asset optimisation and trading, energy
services and sales. Vattenfall’s approximately 28,600 employees work every day
to provide society with reliable energy in a safe and sustainable way. Taking
the lead in, and profiting from, the transformation to a sustainable energy
system across the value chain in northern Europe is a central part of
Vattenfall’s long-term strategy.