With industry divided, EU climate officials are hoping to push through a tightening of the ETS
The European Union’s pioneering Emissions Trading System (ETS) has been in place for two decades, but its facing down a reckoning amid a global carbon pricing slump.
Currently, almost 30% of global greenhouse gases emitted into the atmosphere are subject to carbon pricing, meaning companies have to pay for every tonne of carbon dioxide they emit. But politicians around the globe are losing their nerve. California has just handed out $4 billion in free pollution permits, New York has slashed its climate targets, and Canada scrapped its consumer carbon price and capped part of its industrial scheme.
In Europe, where 40% of worldwide CO2 pricing revenues are accrued in a ‘cap-and-trade’ ETS system that allows one tonne of CO2 to cost around €80, industrialists and politicians are also keen to bury the scheme, accusing it of wrecking the bloc’s economy.
Industry needs “globally competitive energy prices… these cannot exist within the current system”, said Daniel Tamchyna, who heads the Czech chemical industry association SCHP, in late May.
