PARIS (Reuters) - French oil major Total’s CEO Patrick Pouyanne said that a 20 euro per tonne CO2 floor price would be acceptable for Germany and would help European power plants switch from coal to gas.
French President Emmanuel Macron said in September that Europe needs a significant minimum carbon price of at least 25 to 30 euros to boost investment in its energy transition.
Pouyanne told reporters at the UFE electricity conference in Paris that he agrees with utility Engie CEO Isabelle Kocher’s proposal for a 20 euro per tonne minimum carbon price as a 30 euros/tonne price will not be politically acceptable for some other European countries.
“At 30 euros everybody runs away. At 20 euros there is a chance that the Germans will go along,” Pouyanne said.
He added that Germany is concerned about its coal industry and its big industrial companies.
“If we go too fast and too hard, we will not be able to bring them along,” he said.
France and Germany are working on measures to reinforce carbon pricing in the European electricity sector and to reform the European Union’s carbon market.
Pouyanne said the key issue is to encourage European power producers to switch from coal to gas-fired electricity generation and that a 20 euro/tonne price is sufficient for that.
“Britain has made the switch with an 18 pound per tonne price. It worked,” he said.
The UK carbon floor price is set at 18 pounds ($24) per tonne until 2021 and British power companies pay the difference between the EU price and the UK price. Four UK utilities have asked the government to extend Britain’s carbon floor price into the 2020s.
European CO2 emission allowances prices have risen from less than 5 euros/tonne in spring to more than 7 euros in recent weeks. They were auctioned at 7.49 euros on Tuesday.
Carbon front-year allowances <CFI2c1 traded around 7.50 euro a tonne on Tuesday.
Reporting by Geert De Clercq; editing by John Irish