Our initial reaction to key elements of the proposal.
On the package overall
Sandrine Dixson-Declève, Director of the Corporate Leaders Group, CISL said: "While we welcome elements of this new package of reforms with open arms, we remain cautious about its overall strength and potential impact. We are disappointed that the proposal has failed to address the huge oversupply of ETS pollution permits available to the carbon market, nor the inadequate rules to define risk of 'carbon leakage'."
"We have always advocated bold, swift action to ensure the right signals are sent to the market and the carbon price increases significantly. It's the level of the carbon price that will be the make or break of the ETS over the next 10 years – we're yet to be convinced that today's proposal will go far enough to secure the much needed high prices."
On the introduction of the Investment Fund
Sandrine Dixson-Declève said: "We have always advocated a 'stick and carrot' approach so we are pleased to see the introduction of the Innovation Fund. Unlocking innovation and investment in breakthrough technologies is the key to business being able to adopt forward thinking, innovative approaches to operations."
"Our own recent report on the ETS finds that it has helped companies focus on carbon emissions reduction, and those companies that have shown leadership and recognised that the future is low carbon have been rewarded with declining costs, and a drive for creativity and innovation. A smart NER 400 framework should ensure low carbon transformation across all industries as revealed through our consultation with Energy Intensive Sectors under the Green Growth Platform. However, this will require focus on low carbon innovation across all sectors, and commitment from Member States through viable low carbon infrastructure and technology projects."
On the Modernisation Fund
Sandrine Dixson-Declève said: "We believe it is essential to bring the CEE countries on board but must ensure that funds are spent on low carbon infrastructure and properly governed through a transparent and accountable governance structure."