Denmark floats alternative to EU’s carbon market fundraising plan
European Union countries are considering alternatives to an EU plan to use a carbon market reserve to help finance their exit from Russian gas, as some fear the proposal would undermine the bloc’s main climate change policy.
The European Commission published plans in May to end the EU’s reliance on Russian gas this decade, including a proposal to raise €20 billion by allowing countries to sell carbon permits stored in the Emission Trading Scheme’s (ETS) “market stability reserve”.
The reserve began operating in 2019 to tackle a problem of oversupply that for years weighed on carbon prices.
But the plan to draw from the ETS reserve was criticised by analysts who warned it risks undermining trust in the EU’s carbon market.
In response, Denmark has now put forward a counter-proposal to the Commission’s plan that it says treats the carbon market like a “printing press” for money, rather than the bloc’s core tool for cutting greenhouse gas emissions.
