Reports and briefings
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This briefing represents Sandbag's official feedback to the Commission's draft ETS revision.
Building on on our consultation submission and two reports published shortly before and shortly after the Commission proposal, this feedback seeks to summarise our main recommendations and update them in reference to the specific text proposed by the Commission.
We emphasise the need for:
- An increase in the headline ambition of European climate targets and the ETS budget
- Mechanisms that enable the ambition of the cap to be readily increased over time
- Maintaining scarcity within the cap by protecting the Market Stability Reserve and enhancing the New Entrants Reserve
- Tiered and targetted carbon leakage protections that prevent over-allocation and avoid a correction factor.
- Measures to increase innovation funding and make it go further, with more money directed towards industrial decarbonisation
The Polish Ministry of the Economy has been consulting on Poland's energy policy for the first half of this century. The current draft largely forsees business as usual, with an enormous reliance on coal power without Carbon Capture and Storage. In Sandbag's response, we show that costs for consumers will be lower if Poland moves away from subsidising coal, and invests in energy efficiency, and a more balanced energy system including renewables, nuclear, and CCS&U.
Response by the Carbon Tracker Initiative and Sandbag to the HM Treasury Technical Consultation on the Bank of England bill (Consultation closes 11th September 2015)
There are strong environmental imperatives for reducing CO2 and the circular economy can play a critical role in delivering on emissions targets. At present, conventional fossil fuel energy plants along with many industrial facilities operate a linear process
In many circles abating CO2 is seen as purely a liability and not yet as a business opportunity. As such, there is a growing risk that industry with high process emissions will either close or move out from under legally binding caps or stay and seek to undermine the meeting of emissions reductions targets and climate ambition more generally. Helping markets move away from BAU practices and adapt to low-carbon products will require that governments support circular business models and remove barriers that prevent low-carbon innovations being adopted in mainstream markets and products.
- Adopt a 25% target in 2020 by cancelling allowances from the Market Stability Reserve
- Adopt a 50% target in 2030 through a tighter ETS cap, state-level offsets and a safety-valve mechanism
- Keep all unallocated allowances in the Market Stability Reserve
Read the blog here.
On Wednesday 15th July, the EU Commission released new legislation to reform Europe’s key climate policy, the EU Emissions Trading Scheme (EU ETS). This kicks off a year-long debate about how best to marry low carbon ambitions with economic competitiveness. In this briefing, Sandbag explains how the current rules are not sufficiently encouraging major industrial emitters to invest in decarbonisation, and shares its recommendations for reform. Sandbag also launches a new interactive data tool illustrating how many spare free emissions rights industry has built up over time, and forecasting future supply balances.
To promote CCS and other methods of deep industrial decarbonisation, a combination of additional Member State and EU support will be needed, well beyond the proposed Modernisation and NER 400 funds. A supporting policy should be explored based on Contracts For Difference (CFD), similar to the UK's electricity CFDs, but pegged to the carbon price rather than the wholesale electricity price. This could fund any technology which permanently stored or abated CO2 emissions.
Should we ditch the EU Emissions Trading Scheme or drop all other overlapping climate policies?
Neither, argues this new report, but we do need a better policy framework.
The EU’s Emissions Trading Scheme is 10 years old this year. This report places it in the context of other climate and energy policies and explores the impact of external events that have occurred over the last decade.
On July 15th we are expecting a significant ETS reform package to be published, that will spark considerable debate about its future role and how it relates to other EU ambitions and policies. This report is intended to inform that debate.
Sandbag’s response to the European Commission Consultation on the preparation of a legislative proposal on the effort of Member States to reduce their greenhouse gas emissions to meet the European Union's greenhouse gas emission reduction commitment in a 2030 perspective. This consultation specifically focuses on the Effort Sharing Directive.
This represent's Sandbag's submission to the Climate Change Committee's Call for Evidence regarding the 5th Carbon Budget. In light of new developments in the EU ETS, Sandbag leads with the recommendation that the UK budgets should shift to full territorial emissions accounting. This should replace the current system which "nets off" traded sector emisisons against estimated UK allocations in the EU ETS. We also urge the Committee to revise its global "climate objective" to reflect a likely chance of avoiding 2 degrees that is more consistent with the UK's international pledges.