The CEO of Total Europe Patrick Pouyanne has told a French Senate commission that Europe needs an independent carbon market regulator with clear objectives rather than the current scenario which has unnecessarily complicated the market in his view.
Pouyanne said the current EU market cannot work in the long term and take carbon prices to a level where they will encourage investments in less polluting energies.
Companies pay carbon levies under the European Emission Trading System (ETS), which charges more than 11,000 firms for each tonne of carbon dioxide they emit, but the system currently has a glut of around 1.7 billion permits, and prices under the scheme have plummeted from highs over EUR30 in 2008 to current levels around EUR6.
“It cannot work because there are lobbies and people who intervene and there is no mission. The only way to make this market work is to give it to someone with clear objectives to slowly increase the price and regulate quotas.”
“To have a market, you need a regulator and a central bank. Today it is an unbelievable shouting match where everyone is yelling about want they want.”
“I think we should move towards an independent regulator or else the market will not emerge,” he said, adding that Europe needed a progressive carbon tax that will enable the emergence of gas-fired power plants over coal.
Pouyanne cited Germany where reforms have led to a resurgence of coal-fired power plants because of cheaper coal, while gas-fired plants have been eliminated.
“From a climate change perspective, we end up with an absurd energy mix,” he said, adding that a carbon price of about EUR30-40 per tonne would enable the switch from coal-fired power plants to gas and encourage companies to invest in carbon capture and storage research.
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