BRUSSELS – France called on other EU nations to adopt a regional carbon price floor for power generators to promote a shift away from coal to more climate-friendly fuels.
At a conference hosted by France on Monday to debate the issue, French ecology minister Brune Poirson called for a price floor of from 25 to 30 euros per ton in power generation to help accelerate the shift from coal to gas and renewables.
Power generation accounts for about a fifth of the bloc’s total emissions.
“The prices are often too weak to push real changes in behavior and yet this is what we need if we are going to accelerate the fight against climate change,” Poirson said.
The conference in Brussels brought together officials from France, Germany, Britain, Finland, the Netherlands and Sweden to discuss how to send a strong market signal toward meeting the bloc’s goals of reducing greenhouse gases by at least 40 percent by 2030.
Carbon prices under the European Emissions Trading System (ETS), which charges more than 11,000 companies for each ton of carbon dioxide they emit, have suffered from a glut of permits, prompting reforms agreed this year.
Benchmark prices in the EU’s cap-and-trade system hit 10.32 euros/ton on Monday. Analysts expect prices to continue rising as measures designed to curb supply from 2019 get closer.
“It’s true we have reformed the European trading scheme but with the expected price levels for emission permits, coal will remain the most competitive fossil fuel for years to come,” Poirson said.
Such a regional initiative could bring additional emission reductions, revenues for national budgets and reduce the need to subsidize renewables, she argued.
Traders, however, said there is little expectation a Europe-wide floor price would ever materialize in the EU’s trading system.
“It’s really not realistic,” one carbon trader said. “And I don’t see what the point would be. They’ve just passed very ambitious market reforms which will lead to higher prices.”