• French government urges EC to set a minimum price for fossil fuels

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      Patrick Lavery

      Combustion Industry News Editor

The French government has urged the European Commission to move to impose a minimum price on fossil fuels in order to avoid a switch to using them as a result of their currently low prices. France fears that a similar situation may arise in the European energy industry as the recession following the Global Financial Crisis, when a lack of economic activity led to a very low carbon dioxide permit price under the EU Emissions Trading System, creating a disincentive to switch to cleaner power generation. Cheap oil, gas and coal as a result of the COVID-caused economic reduction could derail the EU’s plan to strongly push its Green Deal policy, which aims for net decarbonisation by 2050. Most EU countries appear to be in favour of France’s push, with the Netherlands having previously called for a floor to carbon permit prices, but some countries are against the idea. Poland, for example, with a strong coal industry, has asked for the ETS to be reviewed in light of the pandemic, hoping to reduce financial pressures on fossil fuel use. France has raised two means of effecting a minimum price for fossil fuels, one direct taxation of the fuels (which makes one think of the gilets jaunes protests), and the other through the ETS. The European Commission is to review the carbon market and EU energy taxation rules next year with the aim of aligning them to the Green Deal.