E.ON Demands Harmonisation of European Emissions Trading
"Climate protection and social prosperity are compatible if we systematically develop emissions trading further. We are convinced that a well-functioning market for CO2 allowances is the most efficient way of giving companies incentives for investing in climate-friendly technologies," said Wulf H. Bernotat, CEO of E.ON AG, who today presented the company’s recommendations for the future of European emissions trading. The EU Commission had invited industry to submit proposals for the further development of European emissions trading after 2012. E.ON suggests a set of measures designed to advance the emissions trading scheme at European level and to increase its efficiency and transparency. This is the only way of achieving the EU’s ambitious climate targets without jeopardising Europe’s competitiveness in comparison to other industrial regions.
- Similar installations should be treated the same throughout Europe, irrespective of their location, operator and age. Consequently, allocation rules and reduction targets for sectors covered by emissions trading must be fixed centrally for all member states. The existing national differences cause distortions of competition within Europe. It is also essential that the publication of emissions data is coordinated centrally so that market transparency is ensured.
- Planned and existing installations should be treated the same. The allocation rules must be designed so that there is no incentive to keep old installations running longer than would have been planned in the absence of emissions trading, because this would hinder the construction of new, more efficient installations. At the same time, new installations must not be given preferential treatment leading to the hasty construction of power stations achieving minimal progress, thus leaving no scope for even more advanced installations whose technology is still under development.
- To reduce CO2 emissions from power generation at minimum cost to customers and industry, Europe should use all available technologies, ranging from hydro power and renewable energies to CO2-free power stations and nuclear energy. It ought to be possible for CO2 reductions from climate protection projects under the Kyoto Protocol (JI/CDM projects) to be converted into CO2 allowances without major effort. Furthermore, the European emissions trading system should be linked to other greenhouse gas trading systems in order to achieve worldwide emissions trading in the medium term.
- Following European harmonisation and increased transparency and efficiency, conditions would exist for moving from the free allocation of emission allowances to an auction system. This transition should be phased and long-term. With their decision on auctioning under NAP II, German policy-makers took a step in the right direction. However, to increase the efficiency and credibility of emissions trading as a whole, uniform auctioning must be introduced throughout Europe. At the same time, all market actors and all installations, both new and existing, must be included in the auctioning. The proceeds could be used to cut energy taxes. Simultaneously, other political climate protection instruments that overlap with the emissions trading system must be dismantled throughout Europe if there is any so that energy consumers do not have to pay twice for the cost of climate protection.
E.ON is convinced that emissions trading refined along these lines is the best way of creating incentives for extensive investments in climate protection. At the end of May, E.ON already decided on a comprehensive investment programme fully in keeping with the goals of energy efficiency and climate protection. By the end of 2010, E.ON will initiate investments totalling € 60 billion. State-of-the-art, climate-friendly power stations are one priority amounting to € 12 billion, while renewable energies, especially new wind power stations, will account for € 3 billion. These investments simultaneously benefit climate protection. E.ON’s ambitious goal is to reduce CO2 emissions per MWh to approx. 0.36 tonnes by 2030, which is 50 % lower than in 1990. At the same time, E.ON has decided to pool all its activities in the field of renewable energies in a single company in order to promote their expansion with an even stronger focus.
Further information on climate protection, energy efficiency and E.ON’s investment programme is obtainable on our website www.eon.com.
This press release may contain forward-looking statements based on current assumptions and forecasts made by E.ON Group management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in our public reports filed with the Frankfurt Stock Exchange and with the U.S. Securities and Exchange Commission (including our Annual Report on Form 20-F, in particular to the discussion included in the sections entitled "Item 3. Key Information: Risk Factors", "Item 5. Operating and Financial Review and Prospects", "Item 11. Quantitative and Qualitative Disclosures about Market Risk"). The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.