European CO2 emmissions reach turning point
April 30th 2008

The Emissions Trading Scheme (ETS) mandates companies to offset pollution once they exceed industry limits.Over 10,000 power plants and factories are registered on the scheme, 94% of which have submitted data showing they emitted 1.9 billion tonnes of CO2 last year, a rise of about 1% on what they emitted in 2006.

However as measures implemented to meet tighter pollution caps which were set earlier this year start to take effect, traders predict this figure will turn.

Director of EU emissions trading at Point Carbon, Henrik Hasselknippe, says that while the first stage of the scheme failed to cut emissions this may well change in the second stage.

“If we had seen an unexpected fall in emissions in 2007 that would reflect that firms had already invested to cut emissions, which would mean they would have to buy in fewer credits to cover their emissions during phase II,” said Hasselknippe .

“The figures show emissions haven’t fallen as a result of the scheme up to this point, but the Commission has really turned things around this year.”he explained.

“The figures for 2008 and 2009 will be really interesting as we will begin to see if the higher price of carbon we are experiencing now, and the expectation it will climb further from 2013 when the third phase of the scheme, are encouraging installations to invest in cutting emissions.”

However, environmental group Greenpeace suggested the figures National Grid has announced it is to increase its target of reducing company-wide greenhouse gas emissions from 60% to 80% by 2050, a decision which has been welcomed by environment secretary, Hilary Benn.

It also unveiled its intention to adopt new carbon budgets across its UK and US electricity and gas businesses from April 2009, integrating them into the management of its day-to-day business operations and company performance process, to help achieve this target.

National Grid’s Chief Executive, Steve Holliday, said: “Minimising our impact on the environment while delivering safe, secure and economic supplies of energy to customers is not an option, it is a must. And the two have to be tackled together. We have already reduced our greenhouse gas emissions by 35%, but we need to do more.Adopting carbon budgets and integrating them into our business performance process will encourage our employees to identify new ways to achieve the challenging 80% reduction target, and ensure emissions reductions remain at the heart of our operational decision-making.”

Under its current UK regulatory price controls and US rate plans, show the scheme is failing: “From the numbers, it looks like emissions are going up and that proves that the ETS does not work, it means we are not protecting the climate,” Brussels-based spokeswoman Mahi Sideridou told Reuters news agency.

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