Does the EU carbon market have the right policy for cars?

Road transport should not be top of the list when the European Union expands its carbon market into new sectors, the bloc’s climate policy chief said on Tuesday. 

The European Commission are proposing to reform its carbon market next year, and has mooted the idea of extending the scheme, which will force many companies to buy permits to cover their pollution in major areas such as shipping, buildings and road transport. 

“We’re certainly willing to look into this as a possibility, but at this stage, I personally am not convinced this is the right way forward,” said Frans Timmermans, of the idea of adding road transport to the EU carbon market. 

Speaking at an online event hosted by the NGO Transport & Environment, he said the EU would further tighten the CO2 emissions targets it imposes on carmakers in the coming years, and that this was a “more efficient” method of forcing deep pollution cuts. 

In a bid to force carmakers to expand the share of low-emissions vehicles in their fleets, the 27-country bloc have tightened its car CO2 targets this year. 

While numerous other EU sectors have curbed pollution, transport emissions have remained stubbornly high – in 2018, emissions from transport, including aviation, were roughly a quarter above 1990 levels. 

All sectors should face a price of at least “60 euros per tonne of CO2 in 2023,” the company’s chief lobbyist, Thomas Steg, said. That is more than double the current price of pollution permits in the EU carbon market. 

However, experts have raised doubts over whether the EU carbon market – its flagship climate policy tool – would be effective in pricing emissions from cars. 

A report by consultancy Cambridge Econometrics, published in June, said adding transport to the carbon market would do little to drive extra emissions cuts, because the sector would be “relatively unresponsive” to the carbon price. 

Reported by Kate Abnet 

Sourced Reuters 

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