The Politico and PKEE debate: The coming shakeup of the EU Emissions Trading System

Debata Politico i PKEE: Nadchodzące przetasowanie unijnego systemu handlu uprawnieniami do emisji

Discussing the matters relating to the upcoming revision of the EU Emissions Trading System Directive was the main objective of the debate organised by Politico in cooperation with the Polish Electricity Association (PKEE). The meeting, attended by the European Union officials and the representatives of industry associations, took place on the 20th of April 2021.

Paweł Strączyński, CEO of TAURON and Member of the Management Board of the PKEE, who opened the event, emphasised that to reach at least 55% emissions reduction by 2030, the ETS sectors will have to bear the most significant reduction burden and deliver a reduction of up to 65%, far more than non-ETS sectors. - For that reasonadding or linking new sectors to the current ETS architecture will undoubtedly have an impact on the number of allowances in circulation and further raise the carbon price. With skyrocketing carbon costs, electricity price for end users will continue to rise. The question that must be asked, is whether it is in the spirit of the just transition to put the burden of decarbonisation on the most vulnerable customers - he noted. - Moreover, as the Polish Electricity Association, we believe that to reflect the European Council Conclusions of December last year, the Modernisation Fund should be strengthened proportionally to the increased climate commitments for it to support the modernisation of the power sector in low-income Member States.These resources should be exclusively dedicated to the energy transition and investments in large-scale renewable energy sources like PV, offshore and onshore wind as well as energy storage facilities and cogeneration plants, replacing coal generation - he pointed out.

During the high-level panel, its participants - Haege Fjellheim, head of carbon research, Refinitiv; Adam Guibourgé-Czetwertyński, deputy minister, Ministry of Climate and Environment, Poland; Marco Mensink, director general, the European Chemical Industry Council (CEFIC) and Diederik Samsom, head of the European Commission’s cabinet of executive vice-president for the European Green Deal Frans Timmermans - discussed what parts of the EU are bearing the brunt of higher emissions prices. Moreover, the debate focused on the extension of the ETS to other sectors.

According to Adam Guibourgé-Czetwertyński, deputy minister of Climate and Environment, the regions which are transforming their energy systems and require more investment capital, have to use it up for purchasing the needed allowances. - The situation of Polish energy companies is a good example. Last year they have spent billions of euros on allowances. I could think of better ways to spend that money especially with the very serious investments we have in Poland in renewables he clarified.- However, the biggest problem is not even the amount but the fact that this money, money of a Polish utility company, is leaving Poland and being spent abroad. The allowances are being bought from Member States with surplus allowances. So, we have drainage of financial resources out of the country. The higher the price, the more we are losing - he added.

In the opinion of Marco Mensink, director general, the European Chemical Industry Council (CEFIC), the focus on the carbon price is not the key question in the ETS debate, the price is an outcome of the system. – What we should focus on is that money needs to stimulate the innovation industry to do the decarbonisation - he stressed.

Following the discussion, Diederik Samsom, head the European Commission’s cabinet of executive vice-president for the European Green Deal, Frans Timmermans, noted that the European Commission see merit in expanding the EU ETS to the buildings and road sectors. - If the Commission proposes it, it will be a separate system, possibly with linkages to the EU ETS increasing over time - he said. Commenting on this statement, Adam Guibourgé-Czetwertyński, deputy minister of Climate and Environment has stressed that Poland has two main concerns regarding the extension of the ETS to other sectors: the efficiency and the social impact of these measures.

Event page:

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President Wojciech Dąbrowski on the need to increase the competitiveness of European industry.

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Paweł Cioch, Member of the PKEE Governing Council on equitable energy transition in the context of the European Climate Law.

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