Presentation by Karoliina Anttonen, Ministry of Employment and the Economy. The EU 2030 policy framework for climate and energy: the role of EU ETS.

1. EU 2030 Climate and Energy
Framework
and
EU Emissions Trading Scheme
Karoliina Anttonen, Senior Legal Officer
Energy Department
13.11.2014
E

2. EU GHG Reduction Policy
EU Low Carbon Roadmap 2050 (2011)
Asuminen ja palvelut

3. 2030 Framework for Climate and Energy
• European Council agreed on the Framework on 23 October
2014:
• Domestic GHG emissions reduction by at least 40 % below 1990
level by 2030
• Binding target
• EU ETS sector to reduce emission by 43 % below 2005 level
• Non-ETS to reduce emissions by 30 % below 2005 level
• All Member States will participate in the effort on grounds of
fairness and solidarity
• On EU level a binding at least 27 % renewable energy target
• On EU level an indicative target of at least 27 % energy efficiency
improvement
• European Council will revert to the issue after Paris Climate
Conference

4. Emissions Trading Scheme
• EU ETS continues to be a key instrument in EU climate policy
…but it needs to be fixed
• 43 % reduction target for ETS sector translates into a cap that is
reduced annually by 2,2 % instead of current 1,74 %
• Market stability reserve will be implemented in line with the
Commission proposal
• Discussions on timing ongoing
• Treatment of backloaded allowances

5. Free Allocation
• Free allocation will continue
… as long as no comparable efforts are undertaken in other
major economies
… with the objective of providing appropriate levels of support for
sectors at risk of losing international competitiveness
• Benchmarks will be periodically reviewed
• Direct and indirect carbon costs will be taken into account
• Most efficient installations should not face undue carbon costs
leading to carbon leakage
• Better alignment with changing production levels in different sectors
• ”[A]llowances will be distributed among all Member States on the
basis of verified emissions, without reducing the share of
allowances to be auctioned”
• Reduction of free allocation volumes?

6. Solidarity Shares
• Member States with a GDP per capita below 60% of the EU
average may opt to continue to give free allowances to the energy
sector
• The NER300 facility will be renewed
• Scope will be broadened to low-carbon innovation in the
industry sector
• Initial endowment will be 400 million allowances (NER400)
• A new ”modernisation” reserve of 2 % EUAs will be set aside for
low-income Member States
• 10 % of EUAs to be auctioned will be distributed among MS with
GDP less than 90 % of EU average

7. EUA Price Development
• Multiple targets will have an effect on the
functioning of the ETS
• National RE support schemes are likely to
continue
• Price forecasting is challenging
• PointCarbon analysis:
• Average price 2021-2030 24 €
• Price 2030 35 €

8. Other Features of Interest
• Inclusion of traffic to ETS for interested Member
States
• Promotion of emissions reduction and energy
efficiency in transport, for electric transportation
and for renewable energy sources in transport
also after 2020
• One-off transfer from ETS sector to non-ETS

9. To Be Continued
• Reassessment of target(s) after Paris climate conference
in December 2015
• Legislation proposals to be expected in 2016
• Emissions trading sector
• Non-trading sector
THANK YOU!