European Commission moves to Brexit-proof Emissions Trading System

The European Commission has agreed on a new measure to protect its Emissions Trading System (ETS) against a potential breakdown in Brexit negotiations.

The EU ETS sets a cap on the total emissions from electricity generation and enables UK-based industries to purchase emissions reductions from overseas

The EU ETS sets a cap on the total emissions from electricity generation and enables UK-based industries to purchase emissions reductions from overseas

Member States met on Wednesday (18 October) to agree in principle to change ETS regulations to nullify any permits to emit greenhouse gases under the scheme if they are issued by a country that leaves the bloc from January 2018 and onwards.

The UK is the second largest emitter in the European Union (EU), and research suggests that a UK departure from the EU ETS would tighten the supply-demand balance of the system by around 745 million tonnes.

As noted by Reuters, the new measure is intended to stop potential sell-offs of permits if UK businesses are ejected from the market because of Brexit. The measure still needs a final confirmation from Member States but most analysts claim that the UK will either remain in the system or gain access to it like Norway has.

Research from the Committee on Climate Change found that if the UK did leave the system, then the fifth carbon budget should be extended to a 61% emissions reduction by 2030. The recently-announced Clean Growth Strategy outlines the trajectory towards the approved 57% reduction, but analysis suggests the strategy will fall short.

The EU ETS sets a cap on the total emissions from electricity generation and enables UK-based industries to purchase emissions reductions from overseas, which is often a cheaper alternative than reducing operational emissions directly.

Take-off denied

Energy-intensive industries, like aviation which was added to the market in 2012, benefit from the system. In fact, emissions from aviation account for around 3% of the EU’s total greenhouse gas emissions.

The aviation industry is struggling to implement measures to reduce emissions, and a global deal agreed by the 191 members of the International Civil Aviation Organisation (ICAO) has been greeted with lukewarm reactions.

The members agreed to a last-minute decision to drop plans of aligning ICAO policies with the Paris Agreement’s 1.5/2C pathway. The UK was a part of the Bratislava Declaration which announced in September 2016 that 44 members of the European Conference on Civil Aviation would implement the deal “from the start”. In total, more than a third of the 191 nations, including the UK, volunteered to join the offsetting scheme, but it won’t be introduced until 2021.

The ICAO is pushing towards a 2050 Vision of Sustainable Aviation Fuels, which included volume-based targets for biofuels to reduce sector emissions. The proposal would see 128 million tonnes of biofuel used each year by the sector through to 2040, before ratcheting up use to 285 million tonnes to account for 50% of all aviation fuel by 2050 – more than three times what is currently used for transportation fuel.

Campaigners such as Friends of the Earth (FoE) criticised the scheme, warning that it would “destroy rainforests”.  Already, 25 countries convened by the ICAO have rejected the deal.

“We firmly oppose the promotion of biofuels for aviation,” FoE’s international forests campaigner Jeff Conant said. “The climate and human rights impacts of industrial demand for palm oil are already grave. Instead of driving greater demand, Governments must take urgent measures to reduce the climate impact of aviation by stemming and ultimately reversing its growth.”

Nature’s moment

Instead of burning forests and land for biofuel use, research highlights the benefits of restoring nature. Research published this week by the Nature Conservancy and 15 other institutions found that 37% of the required emissions reduction to prevent dangerous levels of global warming could be achieved through nature restoration.

The study, backed by companies such as Unilever, suggested that planting more trees, improving soil health and protecting peatlands could reduce global emissions by 11.3 billion tonnes annually by 2030. The UK could reduce its emissions by 9% by implementing restoration projects in areas such as the Highlands and the Peak District, the study found.

Commenting on the study, Unilever’s chief executive Paul Polman said: “Climate change threatens the production of food staples like corn, wheat, rice and soy by as much as a quarter – but a global population of nine billion by 2050 will need up to 50% more food. Fortunately, this research shows we have a huge opportunity to reshape our food and land use systems, putting them at the heart of delivering both the Paris Agreement on Climate Change and the Sustainable Development Goals.”

Matt Mace


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