Oil & Gas UK Activity Survey 2016

ACTIVITY SURVEY 2016

Figure 6: EU ETS Carbon Prices

30

25

20

10 EUA Spot Price (€/te CO 2 e) 15

5

0

2008

2009

2010

2011

2012

2013

2014

2015

2016

Source: ICIS Heren, Intercontinental Exchange

The weakness of carbon prices has provoked sustained efforts at EU level to reform the ETS in its current Phase III (2013-20) and to reduce the over-supply of allowances. In September 2015, the EU finally approved the Market Stability Reserve (MSR) designed to reduce the over-supply, which will take effect from 1 January 2019. Legislative scrutiny also began in 2015 on the draft proposal to revise the existing ETS Directive, which will govern Phase IV from 2021 to 2030, to tighten the overall cap and to reduce the degree of carbon leakage support to energy-intensive industries within the ETS.

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