CO2 pricing ‘not enough’ to decarbonise industry, chemical makers say
Despite carbon prices hitting a record-breaking €50 per tonne on Tuesday (4 May), the chemical industry says additional measures are needed to support the transformation to a net-zero economy.
“The ETS is not enough … we need contracts for difference,” said Brigitta Huckstein of BASF, the largest chemical producer in the world, speaking at a webinar on Wednesday (5 May) hosted by the European Chemical Industry Council (CEFIC).
“Rapid acceleration of innovation … will need public support,” said Florie Gonsolin, director of climate change transformation at CEFIC.
Gonsolin warned that the next decade will be critical in demonstrating that a carbon neutral transition in the chemical sector can be a reality.
Yet both Huckstein and Gonsolin pointed out the cost and risk factors associated with the transition, calling for carbon contracts for difference to be implemented in order to ease transitions.
Carbon contracts for difference are a financial instrument guaranteeing a return on carbon neutral investments. The payments are meant to cover the difference between the added costs of carbon neutrality and the CO2 price under the Emissions Trading Scheme (EU ETS).