EU Emissions Trading System ‘more important in cutting emissions than national climate policies’

A newly-published survey reveals this is a reversal of opinion from the EU carbon market in 2019

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The EU Emissions Trading System (ETS) has overtaken national climate policies and is now widely seen as the most important driver in tackling carbon emissions.

That’s according to the 2020 Refinitiv Carbon Survey, which reveals 43% of respondents said the ETS will have a major impact – a much higher share than the 27% that said ‘national climate policies’ and ‘other EU-wide climate policies’ would have a similar effect.

This marks a reversal in opinion from the 2019 edition of the survey, when the EU ETS scored 35% and national climate and energy policies scored 43%.

The report highlights how prior to the mid-March European lockdown, 60% of respondents expected EUA carbon futures prices to remain around or above €25 (£21.8) per tonne in 2020 – however, all respondents after this point expected a price below €25 (£21.8) per tonne in 2020 and 2021.

Anders Nordeng, Senior Analyst at Refinitiv Carbon Research, said: “The shift in sentiment towards the ETS is interesting given the fact that the European Green Deal has dominated the climate policy discussions since the Commission presented its roadmap in December 2019.

“The Green Deal will eventually entail substantial changes also to the EU ETS, but so far, the discussion has revolved around the 2050 Climate Law, whose draft proposal was presented in early March.

“The differences in price expectations also indicate that the Covid-19 pandemic and the following containment measures have pushed carbon stakeholders into a far more bearish position, both in the short- and medium-term.”