6 April 2010 | Luca Del Buono
Biofuel, Carbon, Climate Change, Europe

 

The economic downturn of last year played a huge role in reducing EU CO2 emissions. As a result of the struggling economy, energy demand decreased and industrial output declined. 2009's net total of CO2 output reached 1.887 billion tonnes according to Point Carbon, a market analyst.

Results were measured via the European Union Emissions Trading Scheme (ETS EU), which was first implemented to help the EU reduce carbon emissions following the Kyoto Protocol in 2005. Environmentalists believe that the progress made should prompt more stringent carbon market controls and further carbon reduction.

The EU ETS works on the principle that high CO2 emitters must buy carbon credits for the CO2 emissions they produce-the money is then diverted to developing green technology and reducing the EU carbon footprint along levels prescribed by the Kyoto Protocol. Over 10,000 companies pay for the carbon they emit.

2008 saw a revision of the EU ETS policy and the EU agreed to a new 2013-2020 plan. The renewed plan sought to phase additional industries into the scheme. The EU hopes to reduce CO2 emissions 21% by 2020 from 2005 levels-this target has been criticised for not being ambitious enough by NGO's such as the World Wildlife Fund-the Bali climate summit sought to hold industrialised nations to a 25-40% CO2 reduction. The revised scheme provides for the auctioning carbon credits, rather than the current direct-purchase methods that currently exist. Electric companies will have to purchase 100% of their credits through auction by 2020. In addition, carbon capture and sequestration technologies can be used to negate carbon emissions. Transportation and building emissions will also be phased into the EU ETS 2020 plan.

This report comes as the UK publicly declared support to renew the Kyoto Protocol in order to achieve a globally binding treaty. The EU ETS has been generally seen as a successful programme, although many business leaders believe that it makes UK businesses less competitive. In addition, over-selling the carbon credits early in the programme has led to the devaluation of carbon credits; companies have also been able to bank devalued credits and later reuse them, keeping the price of carbon low.

However, the recent news has strengthened the EU carbon market. Upong the press release the carbon market that saw a 20-eurocent increase in market shares. Author: Michael Good | Climate Action

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