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24th Oct 2020

Germany and France defend emissions trading deal

  • German state secretary Flasbarth (l) and his French counterpart Poirson defended the deal on a reformed emissions trading system (Photo: © BMUB/Sascha Hilgers)

Germany and France voiced their satisfaction over the reform of the EU's emissions trading system on Monday (13 November), although Germany's outgoing state secretary for environment Jochen Flasbarth said he did not expect the system to incentivise heavy emitters to move to cleaner forms of energy.

"We will see [an] increase in prices, it will be more robust," said Flasbarth at a panel discussion at the Bonn climate conference.

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"On one thing I'm quite sure. We will not see prices high enough for a fuel switch. It will not be enough to switch from lignite or hard coal to gas, or even renewables," he said.

Flasbarth's comments are remarkable, because a major goal of the emissions trading system (ETS) is to push companies to move to more efficient energy use or to switch to cleaner alternatives.

The ETS requires several thousands of heavy emitters to hand in carbon credits for every CO2 tonne emitted, but it has been plagued with low prices.

To remedy that, the EU has embarked on a reform of the system, to come into force in 2021.

Last Thursday, negotiators from the Council of the EU – representing national governments – and the European Parliament agreed on a deal of how that reform should look.

Flasbarth defended the reform against another panellist in Bonn, Neil Makaroff, EU Policy Adviser at the environmental Reseau Action Climat (Climate Action Network) France.

Makaroff said the deal was "not a good reform" because it still included "a lot of loopholes and flexibilities".

Most significantly, Makaroff criticised that the reformed ETS would allow "some" funding of projects related to coal power.

The environmentalist was referring to the new Modernisation Fund, of which at most 5.2 percent of funding will be available to projects promoting district heating from coal-fired power plants in Bulgaria and Romania.

While Makaroff was talking, Flasbarth mimicked a face of disapproval and held his thumb and index finger very close to each other, as to indicate that the share was minor.

"Don't make the ETS reform [look] worse than it is," the German later said.

"It sounds like that there is a big loophole for coal. It is not. It is for the poorest countries in Europe, ... Bulgaria and Romania, and it's limited to a very, very small slice. It's not even Poland."

His French counterpart Brune Poirson also defended the ETS reform.

She began by applauding the role of civil society in the public debate over what governments should do to limit climate change.

"I really feel that you have a special responsibility as well, which is one of pushing us of being always more and more ambitious," said Poirson.

"We need you to keep us accountable and really make sure that we do our work well. We also need you because sometimes when we try to be ambitious in our own government, we need advocates outside our government to help us push our agenda internally."

But following the critical remarks by Makaroff and another NGO representative, Poirson said that to be ambitious, one also needs to be realistic.

"I'm really pleased you are pushing us, and please keep doing that, because we need you to push us so that we never fall asleep. So thank you, but I'm also saying; by wanting always more, sometimes you get less."

Both Poirson and Flasbarth said they wanted their countries to phase out coal as an energy source.

Flasbarth, who will not join the new coalition government, said that a date for a coal phase-out was "one of the hot potatoes" during the coalition talks.

Emissions trading deal reached after 'isolating' Poland

EU negotiators reached a deal on the ETS after breaking a deadlock on the eligibility criteria for a modernisation fund. Only Romania and Bulgaria will be allowed to use it to finance projects related to coal.

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