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BRUSSELS, 13 September – In developing measures adopted to buffer the bloc’s carbon market from a so-called hard Brexit, policymakers should make every effort to promote market stability and build confidence in the EU ETS.
Today, the European Parliament will hold a plenary vote on amendments to legislation underpinning the aviation sector’s involvement in the EU ETS. One proposed amendment seeks to ensure that any allowances issued by the UK from 1 January 2018, to any EU ETS participants, will be nullified if the UK will not remain a part of the EU ETS after it quits the bloc.
While still analysing the full ramifications of the proposed amendment, IETA is firm in its belief that a hard Brexit would work to the detriment of the EU ETS. By dividing the currently harmonised market, a hard Brexit would add complexity in compliance and impair market functioning, reducing the economic efficiency of the programme. This is why IETA broadly promotes market solutions that extend across international borders, so that the long-term effort to meet Paris goals can be cost effective.
IETA urges all policymakers to ensure that any measures adopted ensure stable market performance and sustain confidence in the market. IETA is concerned that the proposed amendment offers few details on critical features regarding its operation, making it complex to analyse.
Julia Michalak, IETA’s Director of EU Policy, comments:
“We appreciate that lawmakers are considering how to mitigate the impact of a ‘hard’ Brexit on the EU ETS. Given that this proposal, if adopted, would have a significant impact, we urge the European institutions to urgently clarify how it would be implemented without disrupting market performance. We also call on the UK Government to provide clarity on whether the UK intends to remain a part of or linked to the EU ETS, which would be the preferred solution until the current trading phase ends in 2020 – and ideally beyond.”
IETA stands ready to work with lawmakers to ensure that post-Brexit arrangements do not undermine the smooth functioning of the market.
More information on IETA’s position on the Brexit arrangements is available on our website.