23 Jun 2017
Pöyry develops mechanism to protect the EU Emissions Trading System from overlapping policies
On behalf of the three largest Nordic utilities (Fortum, Statkraft and Vattenfall), Pöyry Management Consulting has developed a Policy Coherence Mechanism to deal with policy overlaps in a structured and predictable manner. The associated report was launched earlier this week at the European Parliament.
Decarbonisation policies, such as support for energy efficiency/renewable energy or the legislated phase out of coal generation, act outside the EU Emissions Trading System (ETS) and subsequently depress carbon prices. Pöyry’s report highlights that policy overlaps have been a significant contributor to the current surplus, and that this contribution is set to continue as a result of incoherent targets and new policies in the 2030 framework.
Pöyry’s proposed Policy Coherence Mechanism ensures that the overlapping policy has a real environmental benefit - as the amount of allowances is reduced and not just redistributed in the system. The mechanism has no impact on the free allocation of allowances to industry to protect it against carbon leakage.
Pöyry believes the mechanism is key to delivering a more effective ETS and to facilitate the cost efficient transformation of the energy sector towards innovative and low-carbon technologies.
Pöyry is an international consulting and engineering company. We deliver smart solutions across power generation, transmission & distribution, forest industry, chemicals & biorefining, mining & metals, transportation and water. Pöyry's net sales in 2016 were EUR 530 million. The company's shares are quoted on Nasdaq Helsinki (POY1V). Approximately 5500 experts. 40 countries. 130 offices.