Institutional Investors Group on Climate Change IIGC has published its recommendations for the EU-ETS emissions trading system. This European wide emissions trading systems is under consideration by the EU Commission. The problem has been the huge amount of allowances due to the low economy situation in Europe and the low price of the allowances.
According to the IIGCC they support the reform of the emissions trading system in order to make the transit to low-carbon economy and to increase the innovations needed in the European industry. According to the White Paper ” Delivering Investment to Implement Europe´s 2030 Climate & Energy Targets” institutional investors support the introduction of an emissions performance standard if the ETS reform is not early enough to attain the 2030 climate targets. This would mean that it sets limits on how polluting power stations are removed from the grid. The IIGCC emphasizes that this standard would be supported only if the ETS is too late for the 2030 targets.
Other recommendations include for example the modernisation fund but the organization sees that it is important to clearly laid out the funding criteria regarding the focusing on sustainable projects. Also the development of comprehensive auctioning is important as a measure of allowance allocation for the energy-intensive industry.
According to IIGCC projected development of the EU-ETS price, it shows that the price will only reach a meaningful level very late in the 2020s and the new measures are thus important. The price would rise from around 10 euros per tonne to above 40 euros per tonne by 2028 if the measures are taken.