The oil market collapse is opening a new debate in Europe about strengthening the carbon market, a key tool in the region’s bid for climate neutrality.
European Union energy ministers are set to discuss on Tuesday the security of supplies and the role of the industry in a plan for an economic recovery from the coronavirus pandemic.
The joint shocks of the viral outbreak and record low oil prices hit the energy markets shortly after the EU announced its Green Deal. That has prompted France to urge bolstering the bloc’s carbon market through measures including a floor price.
“Recent events have in particular led to extremely low fossil fuel prices that do not reflect their true cost for climate,” according to a French document for the ministerial meeting obtained by Bloomberg. “These market conditions place a heavy risk on our energy transition policies. They cancel incentives carefully put in place over the past decade to decarbonise our economies and bring uncertainties, which are detrimental to investments in the energy transition.”
The cost of carbon allowances in the EU Emissions Trading System (ETS), the world’s largest cap-and-trade programme, slumped to an almost two-year low in March. Demand for energy fell amid factory closures and draconian limits on public life, reducing the need for factories and power generators to buy the permits.
Projections of a deep recession stoked concerns that the supply of carbon credits will significantly outstrip demand. That would repeat the experience of the last big recession, which left the market glutted for years and cut carbon prices to a level that had little influence on industry.
France wants a floor for carbon prices that would ensure “appropriate visibility” and leave the market a signal that the ETS will maintain pressure for investments needed to shift the economy away from fossil fuels. This call is set to be back by the Netherlands, a long-time advocate of such a tool.
Introducing a price floor would need approval by EU member states and the European Parliament. The European Commission, which proposes legislation, has so far opposed such measures, saying they go against the market character of the ETS.
The ETS imposes declining pollution caps on thousands of manufacturers and utilities, enabling those who emit less to sell their allowances to those who discharge more carbon dioxide.
Benchmark European emissions permits closed at €20.28 per tonne on Monday, rebounding from as low as €14.3 in mid-March.
To counter the risk of oversupply plaguing the market again, the French government wants to reinforce the Market Stability Reserve, a mechanism that automatically soaks up excess carbon allowances.
“In this context there is an urgent need to build consensus on the order of magnitude of the additional surplus of allowances generated by the crisis and to consider additional measures such as MSR rules, to deal with this surplus with the aim of not falling behind the EU’s climate trajectory,” France said in the document.
Gothia Cup 2025
4,872 matches
1,942 teams
116 pitches
76 nations
26 UAE teams
15 Lebanese teams
2 Kuwaiti teams
Profile box
Company name: baraka
Started: July 2020
Founders: Feras Jalbout and Kunal Taneja
Based: Dubai and Bahrain
Sector: FinTech
Initial investment: $150,000
Current staff: 12
Stage: Pre-seed capital raising of $1 million
Investors: Class 5 Global, FJ Labs, IMO Ventures, The Community Fund, VentureSouq, Fox Ventures, Dr Abdulla Elyas (private investment)
As You Were
Liam Gallagher
(Warner Bros)
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Sun jukebox
Rufus Thomas, Bear Cat (The Answer to Hound Dog) (1953)
This rip-off of Leiber/Stoller’s early rock stomper brought a lawsuit against Phillips and necessitated Presley’s premature sale to RCA.
Elvis Presley, Mystery Train (1955)
The B-side of Presley’s final single for Sun bops with a drummer-less groove.
Johnny Cash and the Tennessee Two, Folsom Prison Blues (1955)
Originally recorded for Sun, Cash’s signature tune was performed for inmates of the titular prison 13 years later.
Carl Perkins, Blue Suede Shoes (1956)
Within a month of Sun’s February release Elvis had his version out on RCA.
Roy Orbison, Ooby Dooby (1956)
An essential piece of irreverent juvenilia from Orbison.
Jerry Lee Lewis, Great Balls of Fire (1957)
Lee’s trademark anthem is one of the era’s best-remembered – and best-selling – songs.
The finalists
Player of the Century, 2001-2020: Cristiano Ronaldo (Juventus), Lionel Messi (Barcelona), Mohamed Salah (Liverpool), Ronaldinho
Coach of the Century, 2001-2020: Pep Guardiola (Manchester City), Jose Mourinho (Tottenham Hotspur), Zinedine Zidane (Real Madrid), Sir Alex Ferguson
Club of the Century, 2001-2020: Al Ahly (Egypt), Bayern Munich (Germany), Barcelona (Spain), Real Madrid (Spain)
Player of the Year: Cristiano Ronaldo, Lionel Messi, Robert Lewandowski (Bayern Munich)
Club of the Year: Bayern Munich, Liverpool, Real Madrid
Coach of the Year: Gian Piero Gasperini (Atalanta), Hans-Dieter Flick (Bayern Munich), Jurgen Klopp (Liverpool)
Agent of the Century, 2001-2020: Giovanni Branchini, Jorge Mendes, Mino Raiola
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
UAE currency: the story behind the money in your pockets
SPAIN SQUAD
Goalkeepers Simon (Athletic Bilbao), De Gea (Manchester United), Sanchez (Brighton)
Defenders Gaya (Valencia), Alba (Barcelona), P Torres (Villarreal), Laporte (Manchester City), Garcia (Manchester City), D Llorente (Leeds), Azpilicueta (Chelsea)
Midfielders Busquets (Barcelona), Rodri (Manchester City), Pedri (Barcelona), Thiago (Liverpool), Koke (Atletico Madrid), Ruiz (Napoli), M Llorente (Atletico Madrid)
Forwards: Olmo (RB Leipzig), Oyarzabal (Real Sociedad), Morata (Juventus), Moreno (Villarreal), F Torres (Manchester City), Traore (Wolves), Sarabia (PSG)
Killing of Qassem Suleimani
