Korhola: an honest look at the factors that disturb the ETS market most is needed; backloading is not the answer for a functioning ETS


”EU emissions trading requires structural reform, but it is essential to take an honest look at the factors that disturb the ETS market most”, underlines Eija-Riitta Korhola, the EPP Group’s negotiator of the legislative proposal considering the backloading scheme.

”In recent climate discussions, the possibility of the collapse of the entire emissions trading system (ETS) has been flashed by supporters of the backloading proposal. However, for the emissions trading system it is the overlapping policies of Member States, especially the renewable energy subsidies and partly also taxation as well as energy efficiency subsidies and regulations that have become detrimental. Overlaps have constantly disturbed the formation of a normalised energy market”

”As the ETS rapporteur of my political group, I have taken a critical stance towards the Commission’s intentions although I can understand the voices that are worried about the future of the ETS with the main concern is that the ETS is replaced by increasingly shattered national approaches, such as the taxation of carbon. However, we should dare to avoid the political volatility created by the backloading proposal as there is little sense in patching the problem with a new one as backloading would only have a cumulative effect. On the contrary, defending the rules of game strengthens the credibility of ETS. What we need now is to take a look at the overlapping policies that have led us here” underlines Eija-Riitta Korhola,

”Intervening with market mechanisms would only convey a worrisome signal of political volatility: who would dare to invest in such a Europe? Raising electricity prices is especially unwise now that the shale-gas boom has opened up the possibility of reasonably-priced energy in other parts of the world”

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