Fortum on the EU Energy and Climate Package: An important and extremely ambitious step forward

Press release

Fortum welcomes the Commission's proposal for an energy and climate package as an important step forward to tackle climate change and enhance a sustainable energy future. Fortum considers CO2 emission reduction as the primary goal. Enhancement of energy efficiency, full auctioning of allowances as well as promotion of renewable energy are important tools for achieving that goal.

Fortum appreciates that emissions trading (ETS), as a market-based and cost-efficient means of reducing emissions, will remain the cornerstone of EU climate policy also after 2012. However, the trading system and carbon market should as soon as possible be expanded, aiming at a global carbon market and price.

The Commission's proposal to start full auctioning from 2013 for electricity generation is an important step in the harmonisation of allocation under ETS and should apply to all electricity in the market. Auctioning also takes away the much criticised windfall profits caused by free allocation. Fortum supports more frequent emissions reporting in order to contribute to a better functioning and transparency of the carbon market. Verification of emissions by a third party should, however, be carried out only annually.

Very ambitious targets for renewable energy require efficient support schemes

The target to increase the share of renewable energy sources (RES) from 8.5% in 2005 to 20% of the EU final energy consumption by 2020 is extremely ambitious. Even if the proposed increases for Finland and Sweden, approx. 10%-points for both countries, are below the EU average, the two countries start from very high levels.

“This makes additional increases challenging and the targets cannot be achieved without considerable support. Cost for the society and energy consumers will be high and consequences for the fuel and energy market remain unclear. Therefore, it is crucial to design the support schemes so that they are market based and efficient. In our opinion, a common market requires common rules, and the target should be a European wide market-based RES support scheme. The first step would be a joint green certificate scheme in the common Nordic electricity market,” says Fortum President and CEO Mikael Lilius.

Emissions captured and stored are not emissions emitted

Projects demonstrating carbon capture and storage in a large scale should receive public support, both EU and national. In long-term, however, application of this technology must depend on emissions trading and the price of CO2 emissions. Fortum supports the Commission's approach that emissions captured and stored are not emissions emitted.

Fortum's long-term vision is to be a CO2-free power and heat company. Due to consequent investments in CO2-free production and switches from fossil fuels to renewable and waste fuels since the beginning of the 1990s, our carbon exposure is among the lowest of European electricity generators (107 g/kWh for 2006). The ongoing EUR 3 billion investment programme will result in 9 TWh of additional CO2-free production. The amount of electricity based on renewable energy sources in Fortum’s portfolio will increase by 1 TWh.

Read more on Fortum’s views on the EU Energy and Climate Package on the Web at www.fortum.com.


Fortum Corporation
Corporate Communications

For more information:
Esa Hyvärinen, Vice President, Public Affairs, Fortum Corporation, +358 40 8262646
Kari Kankaanpää, Manager, Climate Affairs, Fortum Corporation, +358 50 4532330