Expert Warns Price Floors For EU Carbon Emissions Will Drive Heavy Industries Away
Muhammad Irfan 3 days ago Wed 09th June 2021 | 08:53 PM
If the European Union imposes a price cap for its carbon emissions market it risks seeing an exodus of heavy industries and becoming less competitive in the globalized world, Samuele Furfari, a professor of energy geopolitics at the Free University of Brussels, told Sputnik
BRUSSELS (UrduPoint News / Sputnik - 09th June, 2021) If the European Union imposes a price cap for its carbon emissions market it risks seeing an exodus of heavy industries and becoming less competitive in the globalized world, Samuele Furfari, a professor of energy geopolitics at the Free University of Brussels, told Sputnik.
The EU is working to diversify its energy sources, including renewables. In 2019, the European Commission adopted the so-called Green Deal, which aims to cut carbon emissions and build a resource-efficient and environmentally-friendly economy.
Some forces in the European Parliament, such as The Greens/European Free Alliance group, are dissatisfied with the current pace of implementation and propose a 50 euro ($61) floor for the EU Emissions Trading System, which allows carbon-emitting objects to trade reductions. This means that an object which emits less carbon than the permitted limit can sell the surplus to an object that emits more.
"If the European Commission imposes a Carbon Price Floor (CPF) as they are said to prepare for the Green Deal, a CPF that increases every year, to force companies to reduce their emissions, they will 'de facto' suppress the market they created in 2005," Furfari said, adding that "European heavy industries might leave Europe en masse because of it.
The expert warned about the danger of the EU introducing tariffs on imported goods while also forcing its heavy industries out by burdening them with heavy emission regulations.
"'Showing the path forward to the world' is disastrous for the European industry, with many sectors transferring their production units to other countries. Europe is sabotaging itself in an increasingly globalized world," Furfari said.
The bloc's other strategies include the so-called Carbon Border Adjustment mechanism that imposes a tax on imported products from countries that do not follow the same environmental regulations as EU member states and, therefore, can produce cheaper products and emit more CO2.