EU Energy Policy

Gas industry speaks out against EU ETS

Players in the gas industry hit out hard against the EU’s Emission Trading Scheme at an industry event this week, arguing that the low price of carbon favours coal-fired power generation over lower-emitting gas-fired plants Players in the gas industry hit out hard against the EU’s Emission Trading Scheme at an industry event this week, arguing that the low price of carbon favours coal-fired power generation over lower-emitting gas-fired plants.
By Andreas Walstad 18 April 2012 0 9131
A coal-fired plant in Germany. Coal’s share in the country’s energy mix rose between 2010 and 2011, while gas saw little change. (PA)

The economic downturn has led to a surplus of carbon allowances under the EU’s Emission Trading Scheme (ETS) and, consequently prices for the 12 December contract have fallen from above €18 per ton ($23.50) in March last year to around $9.20/t (see All eyes on EU as carbon prices tumble, 30 March 2012). The low price for carbon means coal is more competitive than gas for power generation as coal-fired generators emit more CO2 and typically have to buy more allowances in the market.

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