Steel and cement makers and power plants will reap a €5 billion windfall because of a pricing assumption in the European Union’s Emissions Trading System (EU ETS) that encourages them to trade their carbon pollution allowances rather than cutting back emissions, The Guardian reports. The EU ETS priced the credits at €30 per tonne to discourage companies from relocating to jurisdictions with looser emission rules. “But carbon allowances have not touched that price since 2008, when the ETS was set up, and currently languish at around €6 a tonne, due to economic crisis and a market glut,” Neslen writes. A lower price of €16.50 per tonne would free up another €5 billion in auction revenue for EU member states, according to an unpublished report to the European Commission.
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