The European Commission has been toying with making alterations to its green policies pretty much since introduced, and in fluid times it may be no bad thing.

And fluid the world has been of late.
The EC will make proposals to increase the EU’s carbon market reserve and develop a €30bn decarbonisation fund, responding to the Iran war’s pressure on energy bills.

Tweaks to the Emissions Trading System (ETS), will happen very shortly, according to President Ursula von der Leyen, but not everyone is happy, with criticism that without regulatory stability progress cannot be sustained, or future investments made with certainty.

Vattenfall’s CEO, Anna Borg, warned: “Don’t mess with ETS. Undermining trust in the ETS and in how electricity markets function places the hope for short-term relief over long-term strategy and weakens Europe’s competitiveness.”

The argument, much akin to the UK’s shifting of energy bills to income tax, is that allowing short-term interventions in the ETS and the electricity market design would not make costs disappear, but simply shift them to state budgets.

The piper must be paid, from whatever source, and artificially shifting any burden comes with medium to long-term issues, such are declining investment. Vattenfall are even more bold in the analogy: “It’s like abandoning the insulation of a house halfway because it feels too costly now. The real cost shows up later, in higher energy bills, colder winters, and repair jobs that are far more expensive” a statement says.

As Anna Borg concludes: “Regulatory stability is not a nice to have; it is what enables the massive investments required for the transition. Keep marginal pricing and the ETS as the pillars of the transition intact and give businesses the regulatory certainty needed to keep Europe in the lead. Only a decarbonised Europe is a competitive Europe."

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