April 4, 2017 / 10:50 AM / 10 months ago

EU approves Finnish compensation for indirect carbon market costs

BRUSSELS (Reuters) - EU regulators on Tuesday approved a 149 million euro ($159 million) Finnish scheme to partly compensate energy-intensive industries for higher electricity prices resulting from indirect emission costs under the EU’s Emission Trading System (ETS).

Compensation for indirect costs has been a key part of the ongoing debate on draft measures to fix the ETS, with many countries keen to prevent companies relocating abroad to avoid climate legislation.

Under the scheme, Finland will pay companies 40 percent of costs for the period from 2016 to 2018 and 37.5 percent for the period 2019 to 2020.

The cap-and-trade permit system is the EU’s flagship policy to meet its goal of cutting greenhouse gas emissions from 11,000 industrial plants and power stations by 43 percent by 2030 when compared with levels in 2005.

But the market has suffered from an excess supply of permits since the financial crisis, which depressed prices and prompted proposed reforms.

($1 = 0.9387 euros)

Reporting by Alissa de Carbonnel, editing by David Evans

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