EU set to allow car emissions into carbon trading market

The European Union is set to make it easier to bring road transport emissions into the carbon trading market, a move that critics say could empower carmakers to push back against more effective curbs on greenhouse gases.

The EU’s Emissions Trading System (ETS), key to efforts to reduce emissions, has so far excluded road transport. It has focused on curbing pollution from heavy industry and the power sector by forcing more than 12,000 power plants, factories and airlines to surrender an allowance for every tonne of CO2 emitted under a gradually decreasing emission cap.

But a draft of the EU’s 2030 climate and energy package says individual member states can include road transport in the EU ETS if they choose.

It also calls on the executive European Commission to “further develop instruments and measures for a comprehensive and technology neutral approach for the promotion of emissions reduction and energy efficiency in transport”.

Transport is Europe’s second-largest source of greenhouse gas emissions after the power sector, and is also the fastest-growing one.

Bringing cars into the ETS could reduce the costs the car industry faces in meeting existing regulation as well as tackling the oversupply on the carbon market which has pushed prices of carbon allowances down to around 6 euros ($7.64) per tonne from more than 30 euros six years ago.

But the impact on emissions would be negligible, analysts say. A study published this week by consultancy Cambridge Econometrics estimated that bringing road transport into the ETS would curb emissions by 1 percent by 2030 at current ETS prices.

Climate campaigners say heavy lobbying from business has already ensured a proposed emissions cut of 40 percent will not include a sub-target for transport, whereas the current set of 2020 targets includes a 6 percent cut in road fuel emissions compared with 1990.

Existing EU law also includes emissions standards to limit carbon dioxide pollution from cars, which extend to 2021 and have attracted stiff resistance, especially from the German luxury car sector, led by brands such as BMW and Daimler.

 

ALLCOT