The EU's Emissions Trading Scheme can have an important part to play in reducing global emissions of greenhouse gases after 2012. This is the conclusion presented in a joint report by the Swedish Energy Agency and the Swedish Environmental Protection Agency, which has been submitted to the Swedish Government.
The European Union's Emissions Trading Scheme is the EU's most important means of reducing its greenhouse gas emissions. In their joint report, the Swedish Energy Agency and the Swedish Environmental Protection Agency identify a number of changes and improvements that are desirable if the Scheme is to be continued and extended after 2012. An important feature of these changes is that they should be applied throughout the EU.
In the report, the Agencies recommend that Sweden should press for the EU's Emissions Trading Scheme to be linked to trading schemes in other countries and that CDM credits (from emissions reductions in developing countries) should be allowed in the scheme to a large extent. This requires strict emissions reduction commitments by the EU. Linking the EU's Emissions Trading Scheme with other schemes and mechanisms such as CDM will further objectives of international climate change cooperation, and help maintaining competitiveness of European industry.
The Agencies are of the opinion that, in order to ensure the necessary emissions reductions, and to ensure that industries throughout the EU are subject to the same conditions, the emissions cap applicable to the entire scheme should be set directly at EU level. Sweden should also press for the Scheme to be expanded to include emissions from the aluminium industry, parts of the chemical industry, and active coal mines. European road transport could also be included in the Scheme, but there would need to be consideration of the effects on the competitiveness of European industry. Alternatively, a separate scheme could be established for emissions trading in the transport sector.
In the report, the two agencies support allowing those covered by the Scheme to purchase their emission allowances at auction, instead of (as today) receiving them free of charge. Only industry sectors exposed to extra-European competition could receive free allowances, and then only for as long as their competitors outside Europe do not have to bear any costs for their carbon dioxide emissions. After 2012, emissions trading parties in the European electricity and district heating sector should not continue to receive free allowances, as they are not subject to extra-European competition.
The report has been produced on behalf of the Swedish Government by the Swedish Energy Agency and the Swedish Environmental Protection Agency. The Agencies were instructed to examine how the EU Emissions Trading Scheme should be developed after 2012, with the overall objective of creating suitable conditions for reducing greenhouse gas emissions by 15-30 % by 2020.
Further information:
Executive officer: Mathias Normand, Swedish Energy Agency,
tel. +46 16-544 21 58, 070-231 2083
Head of Department: Thomas Levander, Swedish Energy Agency,
tel. +46 16-544 2032, 070-340 6262
Executive officer: David Mjureke, Swedish Environmental Protection Agency,
tel. +46 8-698 15 55
Head of Department: Lars Westermark, Swedish Environmental Protection Agency, tel. +46 8-698 11 19, 076-886 51 73
