EU’s energy commissioner calls for €12-plus carbon price

Günther Oettinger, the EU’s energy commissioner, yesterday said he would like to see a minimum carbon price of €12 ($15.21).

Speaking to Reuters’ Global Energy and Environment Summit, the commissioner said current EU allowance (EUA) prices, of around €6, “is not a price signal for anything, not for investors and not for consumers”. While he said that a price of €20 per tonne of carbon dioxide is not realistic at the moment, Oettinger told Reuters that he would like to see a price range of €12-18 per EUA, each of which allows the holder to emit the equivalent of one tonne of carbon dioxide. EUA prices have been in the doldrums in recent months, under pressure from a mounting oversupply of allowances – which the European Commission said earlier this week had doubled in 2011, to 900 million allowances – as a consequence of the economic slowdown and the growing penetration of renewable energy generation. The benchmark futures contract ended at €6.62 yesterday on ICE Futures Europe – way below the €17/tonne seen last year. The Commission has been careful over the years not to comment on emissions prices, although recently it has publicly acknowledged that prices are too low to spur necessary clean technology investments, such as renewables and carbon capture and storage. Last week Oettinger said he was supportive of actions that could push EUA prices to €10.