European Union governments remain split on whether to support a pathway to long-term climate goals drafted by the bloc’s regulator that some investors say could bolster carbon prices, according to an EU document.
Environment ministers from the 27-nation EU will discuss the so-called 2050 low-carbon road map when they meet on March 9 in Brussels. The policy paper by the European Commission, the bloc’s regulatory arm, showed the most cost-effective way to achieve the European political pledge of cutting greenhouse gases by at least 80 percent in 2050 would be to lower discharges by 40 percent in 2030 and 60 percent in 2040.
Following three meetings on a statement to be adopted after the March gathering, Denmark, which holds the EU rotating presidency in the first half of this year, proposed governments “welcome” the commission’s roadmap and “recognize” its findings regarding climate milestones for 2030, 2040 and 2050, according to draft conclusions obtained by Bloomberg News.
“While most delegations can support the presidency text, five delegations want to include a 25 percent milestone for the year 2020 in the text and three delegations cannot accept the mentioning of any numbers in relation to the milestones,” according to a note accompanying the draft conclusions.
The draft statement will be discussed by senior diplomats from member states later this week. Some delegations signaled their ministers would wish to raise the matter of the milestones at the March 9 gathering.
The 27-nation bloc, which wants to lead the global fight against climate change, is on track to meet its headline goal of cutting greenhouse gases by 20 percent in 2020. It may exceed the target and reduce pollution by 25 percent should member states deliver on their energy-efficiency pledges, according to the roadmap.
Ministers could also invite the commission “to present timely and cost-effective policy proposals for delivering the reductions in the ‘Low-Carbon Economy Roadmap to 2050’ for the period to 2030; including an assessment of the impacts at the EU and the member states’ level,” according to the draft conclusions.
Support for a policy paper sketching out the most cost-efficient way to long-term climate goals could help the EU bolster the price of allowances in its emissions trading system, the world’s largest, Martin Lidegaard, Denmark’s climate minister, said last month.
Dutch energy company Eneco Holding NV, Denmark’s Dong Energy A/S and U.K.’s second-largest electricity producer SSE Plc in November urged EU regulators to propose an “ambitious” climate and energy package for 2030, saying the power industry requires long-term predictability to make the necessary investment in technological innovations.
The prices of carbon allowances in the EU emissions trading system, the world’s largest, dropped to a four-year low of 6.38 euros ($8.46) a metric ton in January before rising to as high as 9.47 euros today on bets policy makers will act to curb oversupply of permits. The EU ETS is the cornerstone of the region’s climate policy and leads to a cap on utilities and factories in 2020 that will be 21 percent below 2005 levels. It expanded this year into aviation.
In the draft document Denmark proposed EU ministers note that “robust ETS allowances prices” are needed to spur investment and invite the commission to “further consider practical modalities that may be needed” to ensure the cap-and-trade system continues to reward energy efficiency and low-carbon projects.