The market may become short, as the total allocated allowances will be some 7% below the calculated ‘business-as-usual’ emissions. As a result the market for allowances in 2008 is much healthier than in the first phase, with allowance prices staying above €20 /tonne compared with 2007 prices of below €0.10/tonne. With such prices, a lot of measures to reduce emissions finally come into sight.

From next year, the emissions trading scheme should start working like intended: fostering investments in reductions measures. In fact, there are already some signs of this new trend. Companies already know that the present zero-price of 2007 EU Allowances is just a sham, a diversion from what is really happening. As GreenPrices reported earlier, two third of all companies seem to take measures, and in some countries the emissions are even about to curb.

So finally we can observe a trend inversion. Looking back at Commission’s efforts in the last months on the national allocation plans for emission allowances, one can conclude that the Commission has taken full responsibility. Almost all national emissions budgets have been adapted downwards. The Commission may even be facing some legal procedures, started by countries that are determined to ‘protect’ their industries.

So the Commission deserves all credits for an extra push to the sustainable energy markets. Despite all criticism regarding the first phase, let’s keep up the good work!

Rolf de Vos

Editor in chief

GreenPrices

r.devos@greenprices.com