STRASBOURG, 15 February – IETA welcomes the European Parliament’s adoption of a position for negotiations over reform of the EU Emissions Trading Scheme, and calls on the Council to adopt its position so the process can move forward promptly.
The assembly today approved its position on the review of Europe’s emissions market for greenhouse gases. It adopted provisions to double the market stability reserve’s (MSR) intake rate to 24% for its first four years of operation and to cancel 800 million allowances from the MSR in 2021.
The Parliament rejected a proposed border adjustment for cement imports, which means that the cement sector will continue to receive free allowances in Phase 4. Furthermore, the Parliament rejected increase of the linear reduction factor governing the cap from 2021, agreeing instead that an increase from 2.2% to 2.4% could be considered by 2024 at the earliest.
It is now vitally important that co-legislators now build on the momentum from the Parliament’s approval and move to the trilogue negotiations as quickly as possible.
“It’s now up to the Council to adopt its position so that the ETS reform can move forward,” Dirk Forrister, CEO of IETA, said today. “Timing is crucial in order to deliver a clear policy signal to market participants.”
“If the EU ETS isn’t strengthened, Europe risks a proliferation of unilateral national measures that can add inefficiency and increase costs,” added Julia Michalak, IETA’s EU Policy Director.
“Market mechanisms are gaining ground worldwide – Ontario launched its carbon market in January, and China will launch the world’s largest ETS later this year,” Forrister said. “Europe needs to retain its place at the forefront of the climate battle by establishing the policy framework for the next phase in the 2020s – using the market to deliver the most cost-effective emissions reductions to meet Europe’s objectives..
NOTE: The European Council meets at the end of this month. If Member States can agree on a common position, the negotiations between the Parliament, Council and Commission (known as “trilogue negotiations”) can proceed to determine the final shape of the legislation.