Regional carbon price floor 'could speed transition'

Regional carbon price floors in the emissions trading system could help increase the use of emission-free fuel in electricity and heat generation, according to a Finnish government study published this week.

The analysis, carried out by Pöyry Management Consulting, found that a CPF for emission allowances implemented in either the Nordic or Nordic and Baltic regions could reduce use of emission-free fuels, but may also reduce total electricity generation. 

A carbon price floor, designed to ensure the emissions trading system (ETS) works to guide the market, is operated in the UK electricity sector where it has contributed to a decrease in coal generation. A similar mechanism will come into effect in the Netherlands in 2020. The French government has repeatedly called for an EU-wide CPF.

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