With the publication of the European Commission's Phase II National Allocation Plans imminent, the CEO of the UK Association of Electricity Producers has urged Brussels to enforce a firm and fair line across the Eurozone.
David Porter, chief executive of the AEP, said: We fully expect the Commission to follow up on its promise that it will judge Phase II NAPs very strictly. This should lead to much tighter NAPs and a fairer scheme than was the case in Phase I, when the majority of countries gave an excessive number of allowances to their industries. UK competitiveness could be affected if not all member states apply the same strict criteria to their NAPs.
The proper functioning of the emission trading scheme is important to the electricity industry because it gives a value to carbon that helps companies make investment decisions. Electricity companies in the UK plan to invest GBP20 billion by 2020. This investment could look very different depending on what price level the carbon market delivers, he continued.
Phase I of the scheme has been judged by many to have been a failure because most EU nations over allocated their credits, devaluing the system and leaving pollution producers unincentivized to reduce emissions.