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Climate Action EU ETS #EU2030 Jos Delbeke DG CLIMATE ACTION Carbon Expo 2014 – Cologne 28 May 2014.

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Presentation on theme: "Climate Action EU ETS #EU2030 Jos Delbeke DG CLIMATE ACTION Carbon Expo 2014 – Cologne 28 May 2014."— Presentation transcript:

1 Climate Action EU ETS #EU2030 Jos Delbeke DG CLIMATE ACTION Carbon Expo 2014 – Cologne 28 May 2014

2 Climate Action EU overachieves Kyoto commitments 2

3 Climate Action GHG intensity GHG emissions GDP GHG emissions were reduced while GDP increased Over the period 1990- 2012: GDP grew by more than 44% while GHG emissions decreased by 19% GHG intensity reduced by almost half 3

4 Climate Action 2008–2012 -9.2 % change + 1.1 %Due to population increase – 2.4 % Due to fall in GDP per capita – 5.1 % Due to reduced energy intensity (efficiency, structural) – 2.8 % Due to less carbon- intensive fuels (incl. renewables) Change in emissions Climate policies are key Source: EEA 4

5 Climate Action EU economies have become less emission intensive From highest to lowest emission intensity (2012 values) Source: EEA 5

6 Climate Action EU’s GHG emissions per capita decreased by 24% EU average down from 12 to 9 tCO2 eq per capita 6

7 Climate Action 2030 framework : EU prepares for Paris 2015 -20 % Greenhouse Gas Emissions - 40 % Greenhouse Gas Emissions 20% Renewable Energy 20 % Energy Efficiency At least 27 % Renewable Energy At least 27 % Renewable Energy Review 2014 Review 2014 2020 2030 New Key Indicators New governance system Domestic 7

8 Climate Action Improved ETS architecture in phase 3 (2013 to 2020) The EU ETS is working well from a technical point of view Starting last year, it saw a major overhaul Cap-setting is an EU process Auctions are a daily routine Harmonised free allocation to industry and carbon leakage provisions Single registry is operational New rules for recognising international credits Improved protection against fraud (allowances covered by new MiFID) 8

9 Climate Action ETS elements of the 2030 framework In conjunction with the proposed 40% greenhouse gas emissions reduction target:  Increase linear reduction factor as of 2021 from 1.74 % to 2.2% to align the EU ETS cap to proposed 2030 target Addressing structural reform Improved and better focused rules against carbon leakage 9

10 Climate Action The structural reform debate Back-loading Persistent surplus Rapid accumulation * Blue columns represent actual data; Green columns represent projections. 10

11 Climate Action The market stability reserve proposal Dual purpose address the current surplus  If not addressed, the imbalance would profoundly affect ability to meet the medium-term target in a cost-effective manner make the ETS more resilient to possible future demand shocks More flexible auction supply through putting allowances in the reserve in case of too high surplus releasing allowances from the reserve when allowances get scarce Carbon price will be more strongly driven by the mid- and long- term emission reductions 11

12 Climate Action What free allocation and carbon leakage rules for 2030? Worked so far, but needs to be focused Sectoral 2050 low-carbon roadmaps illustrate technological options to cut emissions further Financial/innovation support (e.g. via an expanded NER300 system) to complement free allocation can help unlock new potentials Stakeholder consultation (3 meetings and an online questionnaire) 12

13 Climate Action Timeline 2030 framework  April-May: Member States' assessments of the 2030 framework; work in progress  June: European Council will take stock of progress on the points raised in the conclusions of the March Council.  October: final decision on the framework Market stability reserve is independent of how the 2030 framework rules will look like - no regret measure  Important to have a decision as early as possible 13

14 Climate Action International carbon markets Experience in the EU ETS informs new or emerging systems  e.g. Korea, China  EU support to the development of domestic carbon markets (e.g World Bank Partnership for Market Readiness) Aviation  Within the International Civil Aviation Organization, development of a global market-based mechanism by 2016, for operation from 2020 onwards. International Framework - Paris Agreement  Should facilitate further development of carbon markets by provisions enabling the use of carbon markets for compliance by countries, boosting demand and providing supply. 14

15 Climate Action Thank you for your attention For the EU ETS regulatory updates, subscribe to: 2030 framework: 15

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