Energy giants back calls to cut financial support for polluting powerplants
A coalition of thirteen energy industry firms, including Siemens, Shell and Total, have launched a new joint initiative to limit the amount of state aid subsidies that are sent to highly-polluting fossil fuel plants across the European Union (EU).
Launched on Monday (26 June), the Make Power Clean initiative back the proposal of the European Commission to create a “carbon eligibility” criteria, whereby beneficiaries of state aid for power generation must limit the amount of CO2 released.
In a joint letter to MEPs and the Commission, business leaders from the likes of Statoil and Solar Power Europe said: “Our electricity bills should not support the operation of the most polluting power plants, given that cleaner supply options are available. This would clearly contradict EU climate and energy policy objectives and would go against the best interest of European consumers.”
The members are calling for a cap of 550g of CO2 per kwh for generators receiving capacity mechanism subsidies in the EU. The letter also calls for a transparent criteria mechanism in line with the investment lending policies from the European Investment Bank.
Despite the limit on polluting plants receiving the subsidies, the group claims that these plants can cover their emissions under the Emissions Trading Scheme (ETS). The letter describes the ongoing ETS reform as “critical” in ensuring that a carbon price signal is established in the bloc to encourage the switch towards low-carbon power generation.
Money makes the world go round
The initiative arrives one week after a group of large corporations – including oil giants ExxonMobil, Shell, BP and Total – supported US-based plans for a $40 per tonne carbon tax on emissions.
Major firms including Unilever, PepsiCo, General Motors and Johnson & Johnson all joined the oil giants in backing the Climate Leadership Council led by the Republicans.
It follows from the news that Republican members of the House of Representatives, the lower chamber of US Congress that composes national legislation, had introduced the “Republican Climate Resolution” to champion climate-change awareness.
On a global level, financial heavyweights including Bank of America, Barclays and Hermes Investment Management have teamed-up to introduce the world's first investment-grade carbon pricing system for the power sector.
Even though the investment-grade system is in line with the Paris Agreement, economists have warned that countries need to ramp up taxes on carbon emissions to as much as $100 per metric tonne to avoid severe global warming impacts.