The EU Emissions Trading System is still failing to check the growth of carbon emissions, and instead continues to build up a mountain of surplus permits.
Data released by the European Commission today, analysed by Sandbag, shows that the budget of carbon permits continues to be far higher than actual carbon emissions, with spare permits adding to the huge surplus, which now stands at 170 million tonnes – the same as the annual emissions from 40 million cars.
Unless this surplus is addressed, these banked EUAs will allow pollution to grow unchecked for years.
This adds weight to calls for the EU to increase its emissions reduction target (to 30% by 2020), which would fix the problem. A second option is a ‘recalibration’ of the ETS through setting aside a volume of permits from 2013.
The steel industry is particularly outspoken in objecting to these actions, which is ironic given that it’s surplus grew to 212 million permits, worth €3.4 billion. This windfall and easy ride hasn’t stopped them trying to block progress.
These options are on the table as opportunities: Europe could still rescue its flagship climate policy and set it back on track to promote low-carbon economic growth. The next twelve months will be crucial.
Press release]( release_1April2011.pdf “EU ETS data release April 2011”)