Europe must cut emissions 55 per cent by 2030 to tackle carbon credit glut

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Greenpeace calls for major strengthening of 2030 emissions target, as European Commission seeks to shrink list of companies receiving free permits

The European Commission should aim to cut greenhouse gas emissions 55 per cent against 1990 levels by 2030 if it is to tackle the glut of allowances that has undermined the price of carbon in its flagship emissions trading scheme (ETS).

That is the conclusion of a major new Greenpeace-commissioned report, which examines the impact of the European Commission’s proposed 2030 climate and energy package, which is likely to be finalised by the end of this year.

The Commission has suggested it could target emissions reductions of 40 per cent by 2030, based on the EU’s 2011 roadmap that aims to deliver a low carbon economy by 2050.

But the new report, published yesterday, argues that much steeper cuts of around 49 per cent will be needed if the bloc is to remain on track towards its goal of 80 per cent cuts by 2050. Additionally, it argues that the current surplus of permits from the EU’s ETS, now representing around 1.7 billion tonnes of carbon, would mean even more demanding targets will be needed to stop polluters simply holding on to excess allowances and using them to continue to pollute through the 2020s.

As a result, Greenpeace is now calling on the Commission to up its ambition and set a 55 per cent carbon reduction target, which would both put the EU on track towards its 2050 goal and wipe out the surplus supply of credits in the ETS.

Greenpeace EU climate policy director Joris den Blanken said the 40 per cent proposal put forward by the Commission was “woefully inadequate”, given the impact of a failing ETS. If the EU fails to agree a short-term backloading plan to prop up the carbon price next month, the surplus is expected to grow to two billion tonnes by 2020, meaning that without later action to retire excess credits the market will continue to be dominated by over-supply through the 2020s.

“The EU needs a stricter 2030 target if it wants to keep the ETS alive and avoid the most severe effects of climate change,” he said.

Greenpeace’s proposals are closer to the UK’s plan to introduce a 50 per cent CO2 reduction target for 2030. However, unlike Greenpeace the UK has rejected proposals for a renewable energy target that would sit alongside the greenhouse gas goal.

The report comes just a day after the Commission revealed plans to reduce the number of sectors that receive free carbon allowances from 2020. The so-called Carbon Leakage List, which is designed to address industry concerns that the ETS will push up the cost of doing business in Europe prompting some firms to migrate overseas, currently includes 154 sectors and 16 sub-sectors for the period 2009-2014, including steel and cement.

Read more: 
http://www.businessgreen.com/bg/news/2274160/europe-must-cut-emissions-55-per-cent-by-2030-to-tackle-carbon-credit-glut

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