Covid-19: Carbon floor needed to avoid carbon price crash

EU policymakers should enforce carbon floor prices along with cancelling the increasing surplus allowances in the face of the recent CO2 price crash resulting from the Covid-19 crisis, environmental groups suggested on Tuesday.

As fossil fuel power plants are closed down, EU governments can help strengthen the emissions trading system (ETS) by cancelling surplus allowances as provided for in the EU legislation, said Sam Van den plas, policy director at Carbon Market Watch.

“Implementing either national or regional carbon floor prices would be an ideal measure to strengthen the EU ETS and provide the necessary incentives to phase out coal,” he added, while counteracting the partial offset in industrial sectors such as steel, chemicals, cement and aviation.

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