Greens think Europe shouldn’t include road transport in the EU carbon market

Environmental campaigners think Europe shouldn’t follow California’s lead and include road transport in the EU carbon market.

Bringing transport into the EU Emissions Trading System (ETS) could bring down the costs the car industry faces in meeting existing regulation as well as tackling the oversupply on the carbon market. Environmental campaigners, however, say such a move would undermine more-effective policies.

The arguments are likely to flare later this year when the European Commission, the EU executive, is expected to make a policy statement on a new 2025 standard for CO2 emissions from cars and EU leaders set a 2030 goal for overall emission reductions.

So far emissions from Europe’s transport sector, which accounts for a fifth of all EU greenhouse gas discharges, have been forced downwards by emission standards for new cars. These have compelled carmakers to make engines more efficient, although testing loopholes have raised doubts over their effectiveness.

Even the diluted goals are still the toughest in the world and carmakers say any further cuts would be technically difficult. They also say they face higher costs than other sectors to meet existing goals, but so far have stopped short of saying publicly they want transport to be in the ETS.

The idea is that the market sets a carbon price and then allows included sectors to choose how they reduce emissions, theoretically at lowest cost.

Environmental campaigners T&E oppose including road transport in the ETS. They say it would do little to cut emissions and make it easier for carmakers to persuade lawmakers to scale back more-effective policies such as road taxes.