CRU: European Producers Must Adapt to High ETS Prices as a New Normal

LONDON, June 25, 2019 /PRNewswire/ -- EU's flagship climate change policy, the Emissions Trading Scheme could fundamentally alter the economics of metals production in Europe.

The European Union is forging ahead on its commitments on climate change under the Paris Accord. The EU pledge to reduce greenhouse gas emissions by 20% by 2020 and 40% by 2030 from 1990 levels can only be achieved with further policy commitments. These policies are likely to have important impacts on metals and fertiliser value chains; the complexity of the rules means that some plants will be affected more than others.

The EU ETS will change, potentially fundamentally, the economics of metals production in Europe. The value of these allowances (the carbon price) has spiralled, rising from €4.40/t in Jan 2013 to around €25/t in June 2019. This reflects recent reforms to the policy including the introduction of the "Market Stability Reserve" in Jan 2019; And further reinforcements are anticipated as part of Phase IV of the scheme, beginning in 2021.

In this Insight, one in a series on the EU's emissions trading scheme, CRU consultant Ben Jones, explains why we believe downstream European producers need to factor in higher emissions allowance prices in the long term.

Read the full story: https://www.crugroup.com/knowledge-and-insights/spotlights/2019/european-producers-must-adapt-to-high-ets-prices-as-a-new-normal/ 

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About CRU

CRU offers unrivalled business intelligence on the global metals, mining and fertilizer industries through market analysis, price assessments, consultancy and events.

Since our foundation by Robert Perlman in 1969, we have consistently invested in primary research and robust methodologies, and developed expert teams in key locations worldwide, including in hard-to-reach markets such as China.

CRU employs over 280 experts and has more than 11 offices around the world, in Europe, the Americas, China, Asia and Australia – our office in Beijing opened in 2004 and Singapore in 2018.

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