London (Platts)--26Feb2013/823 am EST/1323 GMT

German utility lobby group BDEW is supporting the EC's backloading plan as a one-off intervention to fix the current supply-glut in the EU emissions trading system and called upon the German government to launch a discussion about binding EU emissions targets for 2030.

"A one-off reduction in CO2-emissions certificates, as agreed last week by the relevant committee in the EU parliament, is a useful measure, considering the continued decline in prices," BDEW managing director Hildegard Mueller said Tuesday at a renewables conference in Berlin.

"However, constant interventions threaten investment," he said, according to a statement by the BDEW. BDEW represents companies responsible for 90% of electricity sales in Germany.

"We need a fundamental reform of the CO2 certificates trading," said Mueller. "It is therefore time to have a discussion about ambitious and binding targets for EU-wide carbon emissions cuts for 2030."

Article continues below...

Platts 4th Annual European Power Generation Conference European power: timing the tipping point: April 22-23, Dusseldorf, Germany
	Platts 4th annual European Power Generation conference will focus exclusively on power generation, with sessions addressing the latest trends and developments in conventional generation, renewables, large scale low carbon generation and biomass, market design and issues around infrastructure investment.

According to the BDEW, the time frame until 2020 is already too short for many investment decisions to be made by energy companies, while the time frame to 2050, outlined in the broader EU climate road map is too long for many investment decisions.

"Therefore, a binding emissions reduction target for 2030 should be set as an intermediate target. Only such a reliable framework will trigger the investment needed to achieve the climate change objectives," said Mueller, who was a minister in Chancellor Merkel's government from 2005-08.

Last week, the environment committee of the European Parliament (ENVI) adopted the European Commission's proposal to amend the emissions trading system. Accordingly, the Commission would be given the opportunity to hold back once a total of 900 million allowances over the 2013-15 period and to re-inject this back into the market in 2019-20.

However, the backloading plan still needs the approval of the full European Parliament, before it goes to the member states in the Council for final approval, where Germany's position will be key.

The German government has not decided yet on its position with the environment minister reportedly in favor of the plan and the economy ministry against the proposal.

"A permanent stabilization of carbon prices would also dampen the costs for renewable energy," BDEW's Mueller said, referring to a current discussion in Germany about spiraling household electricity prices due to the increased costs for renewable power, which now contributes almost a quarter to German electricity demand.

Germany's environment and economy ministers agreed earlier this month to freeze the renewable power surcharge paid by consumers for the coming two years. The bill is planned to be introduced in August before Germany will vote for a new parliament and government in September.

--Andreas Franke, andreas_franke@platts.com
--Edited by Martin O'Rourke, martin_orourke@platts.com

Tweet