The European Commission has proposed setting a binding greenhouse gas emissions reduction target of 40 percent below 1990 levels for 2030, reports Thomson Reuters Point Carbon.
The target, which aims to boost sagging carbon offset prices while maintain Europe’s leadership on climate policy, is at the higher end of expectations, according to the analysis group.
“The proposals tabled by the European Commission will kick off a process that will shape the EU’s climate and energy policy towards 2030,” said Thomson Reuters Point Carbon. “If confirmed by the member states by the end of this year, the EU will likely use this relatively ambitious target to put pressure on other countries in the international climate talks.”
The E.U.’s leadership position on climate has lost some momentum in recent years due to its struggling carbon market — a product of oversupplied carbon offsets — and action by other countries. Thomson Reuters Point Carbon says that if the new target and other proposals are passed, E.U. carbon credits could surge by 50 percent.
“If this proposal is adopted it would significantly lift the carbon price,” said Marcus Ferdinand, head of EU carbon analysis at Thomson Reuters Point Carbon. “This is on average €12 higher than it would otherwise be.”
The European Commission also proposed an EU-wide target for renewable energy, albeit one that doesn’t set targets for individual countries.
“The European Commission seems to be strengthening the role of its emissions trading scheme as the most important instrument to achieve the overall climate and renewable energy targets,” said Ferdinand. “The proposed target on renewable energy consumption is at the lower end of expectations and marks a shift away from the current policy of setting targets for each member state. This could be a game-changer for investors in renewable energy, who will have to rely increasingly on the carbon price signal rather than on national support schemes.”
