CO2 quotas must be on equal terms 

By Maj-Britt Meyer Hansen, 21. June 2007

According an article in Saturday’s ‘Information’, EU’s CO2 quotas will lead to the opening of more coal-fired power stations in Europe, thus sabotaging the aim of reducing CO2 emissions.

- ‘Information’ is way off beam here. The targets for CO2 reduction are fixed up to 2012. The CO2 quota market is the means of achieving these targets, says Chief Consultant at the Danish Energy Association, Charlotte Søndergren.

- The CO2 quota market was introduced to bring down CO2 in Europe in the cheapest possible way. It works by imposing extra costs on power stations which emit CO2. As compensation, the power stations receive free quotas.

- Electricity prices will rise and the consumer will pay the cost of reaching the CO2 target. The rise in electricity prices will benefit both power stations and wind power turbines.

In Denmark existing power stations are being allocated quotas corresponding to 57% of their CO2 emissions. In other words the stations need to go out and buy quotas corresponding to 43% of their emissions.

- The sustainable energy providers are not subject to corresponding costs, so the CO2 quota system is a competitive advantage for them, says Søndergren.

- There is still a need for new power stations to replace the old. The present allocation of CO2 quotas in Europe makes it more attractive to invest in Germany, where new coal-fired power stations receive three times the CO2 quotas that they do in Denmark.

- That is why we need to look forward to the period after 2012 and correct this teething problem on the CO2 market.

There are several ways this problem could be solved. One model is to allocate free quotas on a benchmarking system across Europe, so businesses in the same sector all enjoy the same terms. Another model is full auctioning of all CO2 quotas, which would mean no free quotas at all.

- The important thing is that all plants across Europe are treated equally, so investments flow to wherever there is a need for new power stations, Søndergren concludes.



  • Chief Consultant, Civil Engineer
  • Charlotte Søndergren
  • T: +45 35 300 424
  • M: +45 22 750 424