EU leaders to consider carbon border tax
French president Emmanuel Macron is expected to raise the topic of an EU carbon border tax at a summit of EU leaders due to be held 17-18 July.
EU leaders will meet in Brussels next month to discuss the EU's Covid-19 recovery plan and a new long-term EU budget.
Macron has said that he can be "counted upon" at the meeting to also put forward issues for discussion including an EU carbon border tax and "greening" the EU's common agricultural policy.
"The European level is essential if we want a real carbon price, a real border tax, real investments for our industries and to transform them and for our agricultural policy," Macron told delegates at an environmental conference in Paris.
"The priority for me in the coming months is to avoid bias and distortion of competition is to establish a truly European carbon tax, to really raise the reference price, get a floor price and border tax. This is key if we want to meet not only our goals, as we should, but also raise our 2030 targets with a credible trajectory," Macron said.
Speaking yesterday with Macron in Berlin, German chancellor Angela Merkel said proposals for climate action and a "border adjustment tax" would be supported by Germany.
"We need such a tax. It has to be decided together with our climate targets. It's important for Germany — but I don't think there's any contradiction with France — that it's WTO compatible," Merkel said.
"If we have very ambitious climate protection goals, then we have to protect ourselves from importers whose products are more climate harmful or emit much more CO2," she said.
Merkel identified two potential "protection" options for industry, notably granting compensation to energy-intensive industries for the power price as well as a border adjustment tax.
European Commission president Ursula von der Leyen has supported an EU-wide carbon border tax, having initially put forward the idea as part of her green deal package of measures last year.
In May, the commission presented a proposal for the EU's six-year budget period. The draft budget included estimates of revenue reaching €5bn-14bn ($5.6bn-15.7bn) from a carbon border adjustment mechanism.
Related news posts
Asia's coal phaseout needs emissions disclosures: IEEFA
Asia's coal phaseout needs emissions disclosures: IEEFA
Singapore, 5 September (Argus) — The phasedown of Asian coal-powered plants requires stricter emissions disclosures, which will in turn reduce investment, said speakers at an Institute for Energy Economics and Financial Analysis (IEEFA) conference this week. One of the biggest short-term challenges for coal-fired abatement is that the coal price has halved from about $240/t to about $130/t right now, said energy finance analyst at IEEFA, Ghee Peh, on 3 September at the IEEFA Energy Finance 2024conference in Kuala Lumpur, Malaysia. The greater shift towards renewable energy means that demand for coal-fired power is falling, but coal plants are still profitable and coal prices will eventually rebound as new supply is limited. "So what we can do as a larger group is to continue to pressure the financing side," said Peh. This can be done by encouraging greater emissions disclosure, which will then influence investors' decisions, he added. "The good news is that in Asia, Singapore, Hong Kong are moving towards disclosures by next year on Scope 1, 2 and 3 emissions, so investors will know how much a company emits, and that will contribute to a very decisive investor response," said Peh, adding that local regulators should put the onus on companies to disclose their emissions as soon as possible. Coal-mine methane emissions Methane is one of the most potent greenhouse gases (GHGs) and coal mining is one of the biggest sources of methane emissions. Just over 40mn t of coal-mine methane (CMM) was released into the atmosphere in 2022, according to IEA data, representing more than 10pc of total methane emissions from human activity. The EU approved a regulation on 27 May that requires the measuring, reporting and verifying of methane emissions from coal, oil and fossil gas exploration and production, distribution and underground storage, including LNG. It also establishes equivalence of methane monitoring, reporting and verification measures from 1 January 2027, and EU importers by mid-2030 have to demonstrate that the methane intensity of the production of crude, natural gas and coal imported to the EU is below maximum methane intensity values. It is therefore important to address CMM as this affects countries in Asia, said independent global energy think tank Ember's CMM programme director Eleanor Whittle. At the moment, none of the 10 biggest exporting countries to the EU meet its standards. But CMM emissions are rarely ever reported or even properly measured, she added, and measuring CMM could even double companies' reported emissions. "We did research that found that in Australia, a shift to company-led emissions reporting — but without verification — meant that overnight, hundreds of thousands [of tonnes] of carbon dioxide equivalent in the form of methane were erased, but without any mitigation or change in coal mining," said Whittle. This shows that even without improvements in the framework methane measurement and verification frameworks, policy shifts like these can still have a profound impact on short-term warming, she said. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Parliament discusses EU’s Cop 29 negotiating position
Parliament discusses EU’s Cop 29 negotiating position
Brussels, 4 September (Argus) — The European Parliament today continued discussions on a draft resolution which will shape the EU's negotiating stance at the UN Cop 29 climate summit in November. But groups within the EU disagree on elements of the draft, including the bloc's own emissions reduction targets. The European Commission has a preferred target to reduce greenhouse gas (GHG) emissions by 90pc by 2040, from a 1990 baseline, but this remains a proposal. The European scientific advisory board recommended a 90-95pc cut in GHGs over the same timeframe. "We will block any mention of 95pc [emissions cuts]… For 90pc, we need more conditions. We must stop setting targets without knowing how to achieve them," German EPP member Peter Liese told Argus , after a meeting of parliament's environment committee. The centre-right EPP is the largest party in th EU parliament. Liese is pushing for the European Commission to focus more on "enabling" infrastructure for carbon capture and storage (CCS), accelerating the permitting process for renewables, and decarbonising industry. And while Liese personally supports a 90pc GHG reduction target, he noted that his EPP group is "not yet there". Spanish centre-left S&D member Javi Lopez wants the EU to maintain ambitious climate goals for the sake of the entire planet, advocating for more ambitious nationally determined contributions (NDCs). Renew Europe's Swedish liberal Emma Wiesner also wants more ambition, calling the current draft resolution "very weak". Wiesner criticised the omission of strong wording on carbon pricing in the resolution. Parliament should focus on establishing a global price on CO2 and prevent Cop 29 discussions from using Article 6 of the Paris Agreement to obscure emissions reductions through removals, Wiesner said. Article 6 allows countries to transfer carbon credits earned from cutting GHG emissions to help other countries meet their climate targets. And groups are not yet aligned on climate finance — the topic set to take centre stage at Cop 29. The EU cannot bear the entire cost of climate action, Portuguese EPP member Lidia Pereira said. Countries like China, Singapore and Saudi Arabia should also contribute more to climate financing, she said. Czech conservative ECR member Alexandr Vondra echoed this sentiment. "It's impossible for us to pay the bills for the whole world," he said. Austrian Green member Lena Schilling wants any Baku agreement to provide a new post-2025 climate finance goal — the next stage of the current $100bn/yr target for international climate finance. Schilling further called for the EU to advocate for a phase-out of coal by 2030, gas by 2035, and oil by 2040 "at the latest". By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
New Zealand carbon credit auction fails to clear again
New Zealand carbon credit auction fails to clear again
Sydney, 4 September (Argus) — New Zealand's quarterly carbon allowance auction failed to clear today for the second consecutive time this year, with no bids submitted as prices in the secondary market have been below the regulated auction price floor. A total of 7.6mn New Zealand emissions units (NZUs) were left unsold on 4 September, including 4.08mn remaining from the previous two quarterly auctions of 2024, with the June sale also attracting no bids . The secondary market closed at NZ$61.95 ($38) on 3 September, the New Zealand Stock Exchange (NZX) and European Energy Exchange (EEX) — which jointly operate the country's Emissions Trading Scheme (ETS) auction — said on 4 September. This is below the regulated auction price floor of NZ$64. All available units will now be rolled over to the final 2024 auction on 4 December, when around 11.13mn NZUs will be offered. All unsold volumes in the year will be cancelled, adding to the 23mn units that were written off in 2023 as all four auctions that year failed . The New Zealand carbon market has been struggling with a growing oversupply in recent years. The coalition government, following advice from the country's Climate Change Commission (CCC), announced in August it will more than halve auction volumes over 2025-29 to 21.2mn from 45mn to tackle the situation. Auction volumes will be 6mn in 2025, with 1.5mn per quarter, while the auction price floor will rise to NZ$68. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
IEA backs South Korea’s CFE after legal setback
IEA backs South Korea’s CFE after legal setback
Singapore, 3 September (Argus) — The IEA today expressed support for South Korea's carbon-free energy (CFE) initiative, days after the country's constitutional court ruled that its carbon neutrality law does not conform to the constitution. The CFE initiative aims to expand all forms of energy sources that do not emit greenhouse gases (GHGs), which notably includes nuclear power, as well as hydrogen and carbon capture, utilisation and storage. The IEA and South Korea also plan to further work together on the initiative to achieve net zero emissions by 2050. The IEA and South Korea earlier in March also started a research project to analyse the viability of deploying a range of carbon-free energy sources. But the endorsement for the South Korean-led CFE initiative comes after the country's constitutional court on 29 August ruled that its carbon neutrality law fails to "effectively guarantee gradual and continuous reductions up to 2050, the target year for carbon neutrality". This was because the law does not provide quantitative goals for GHG reduction targets over 2031-49, with the constitutional court adding that the GHG reduction targets are governed in a way that "shifts an excessive burden to the future". Part of the legislation of the Framework Act on Carbon Neutrality and Green Growth for Coping with Climate Crisis states that the government shall set "a national mid- and long-term greenhouse gas reduction target" to reduce national GHG emissions by at least 35pc from the 2018 level by 2030. South Korea is aiming to cut emissions by 40pc from 2018 levels by 2030 and carbon neutrality by 2050. The regulation lacks "the required minimum characteristic as a protective measure that corresponds with the risk situation of the climate crisis and thereby violated the principle of prohibition of insufficient protection" with regards to the governance of reduction targets over 2031-49, according to the constitutional court. Not prescribing any approximate quantitative reduction targets for 2031-49 and having the government decide on the matter every five years also "violated the principle of statutory reservation which includes the principle of parliamentary reservation", the constitutional court added. It is the duty of the state to "address the climate crisis by taking measures to mitigate such risks through reducing the causes of climate change and to adapt to its consequences". The court did not declare a simple unconstitutional decision, as this would mean the law losing its effect in its entirely, including the quantitative intermediate target. This would result in a "more unconstitutional situation" where the institutional mechanism for GHG mechanism regresses. The law will instead stay in force until it is amended, with a deadline of 28 February 2026. By Tng Yong Li Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more