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War Requires Rethink of EU Carbon Reform, Market Architect Says

  • Delbeke says immediate CO2 supply cuts may magnify price hikes
  • Europe should aim for 60-90 euro price range, Delbeke says
A wind turbine and chimneys at a steel plant in Ghent, Belgium. 

A wind turbine and chimneys at a steel plant in Ghent, Belgium. 

Photographer: Valeria Mongelli/Bloomberg

The deepest overhaul of the European Union’s carbon market should be adapted to the drastically changed energy landscape caused by Russia’s invasion of Ukraine, according to Jos Delbeke, a key architect of the bloc’s cap-and-trade system. 

European governments and the EU Parliament are currently negotiating a set of climate and energy reforms to implement a tougher emissions-reduction goal for 2030. Some elements, such as limiting the supply of pollution rights, need revising because the upheaval to natural gas and coal markets due to the war is likely to stay for longer than thought, Delbeke said in an interview.