EU Commissioner Ribera reassures Finnish companies: “We do not punish early pioneers”

First Vice-President of the Commission Teresa Ribera is currently visiting Finland. The influential Spanish politician is responsible for Europe’s competitiveness and clean transition. Ribera is very much on guard when there is tension in Finland, whether the EU’s emissions trading system (ETS) will be preserved and what kind of changes are coming to it from the Commission in July.

Some of the EU member states have pushed to put emissions trading on hold and to lower the price of emission rights. Instead, Finland and Finnish companies consider emissions trading to be the primary tool of the EU’s climate policy.

For months now, Finnish ministers have been lobbying the commission in favor of keeping emissions trading, because it is considered the most effective tool for reducing emissions and promoting clean investments.

Finland has communicated to the Commission and directly to Ribera that the number of emission allowances must be in line with the EU’s climate goals, and the system must provide a predictable and stable operating environment for investments.

On Thursday, Kauppalehti asked Ribera whether emissions trading will continue to be the EU’s most effective means of reducing emissions in the future, and what kind of changes are coming to it in July, when the emissions trading reforms are announced.

“I think the ETS will remain an important tool for reducing emissions in the EU”, answered Ribeira.

“I hope that the ETS will be ambitiously updated and that the way it is implemented will be reformed,” said Ribera.

According to the vice-president of the commission, emissions trading has so far been the most effective tool for reducing emissions and for economic growth and low-carbon economy.

Ribera stated that the next 20-year period may bring different challenges than the first 20-year period, but the ambitious goals remain.

“Coal pricing, the right level, sufficient ambition, the emission reduction path and how we use the ETS as an incentive for rapid industrial decarbonisation are still the same key goals as 20 years ago,” said Ribera.

He emphasized that globally it is important to ensure that the EU invests in low-carbonization of its own industrial capacity and that protection mechanisms are in place so that this does not lead to unfair competition.

Ribera pointed out that the low-carbonization of the entire economy cannot be based on emissions trading alone. Other actions are also needed, such as electrification and reducing the use of energy based on fossil fuels.

“How do we better take into account emissions from land use without causing additional stress to rural areas, especially those living in forested areas – so there are many issues that need to be resolved,” said Ribera.

Are pioneers punished?

The original idea of ​​emissions trading was that if you reduce fossil emissions, you save emission rights and benefit from climate action financially.

However, the situation became problematic for the Finnish and Swedish forest industry during the previous commission’s term, when a clause was added to the emissions trading regulation, according to which a plant leaves the scope of emissions trading and free emission rights if more than 95 percent of its emissions are bio-derived.

The current 95 percent rule means that if a factory reduces fossil emissions too much, it will lose the free emission rights completely.

Since the Finnish forest industry has significantly reduced its fossil emissions, the development leads to the fact that the cleanest factories lose free rights and find themselves in a weaker position than more polluting factories.

Finland has actively communicated to the Commission that the treatment of plants using 95% biomass must be consistent and predictable.

Kauppalehti asked Ribera how the Commission intends to ensure that Finnish companies, which have already invested significantly in low carbon, do not find themselves at a competitive disadvantage on the global market due to future changes to the EU’s climate framework, such as the Emissions Trading System (ETS).

Ribera emphasized in his answer that it is important to stick to a reliable and credible development path that attracts investments.

“We must not “punish” the early pioneers, but we must ensure that they can continue their activities.”

“They have made strategic decisions based on what has been predictable, stable and reliable, and we Europeans want to be predictable, stable and reliable,” Ribera promised.

Finally, he emphasized that emissions trading must remain the central driving force of the EU’s climate action.

“Those who started first deserve respect. From the point of view of wealth creation and competitiveness, it (ETS) is a very powerful tool,” said Ribera.