Three Nordic utilities call for action to strengthen the EU carbon market
20.05.2016 09:24 | pressrelease
(May 20, 2016) 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 (emissions trading system) 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'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 Helsinki.
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 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.