No agreement on starting date for EU carbon market reform

After a tight vote on Thursday (Jan. 22), the European Parliament’s Industry and Energy Committee  (ITRE) was unable to agree on the date that the EU Emissions Trading Scheme (ETS) would be reformed, Reuters reported.

Although ITRE vote was indicative and is to merely give its opinion for a vote in the lead ENVI committee on 24 February, it was the first important indication as to what the European Parliament’s final stance will be on the Market Stability Reserve.

The reform proposed the removal of around two billion carbon allowances (EUAs) from the ETS in 2021 and the subsequent monitoring of the system’s allowance surplus through a Market Stability Reserve. While the date initially proposed for the reform was 2021, Britain and Germany called for the start date to be advanced to 2017 in order to raise the allowance price and therefore low carbon investments.

The ITRE committee first rejected the proposed amendment that the reform should begin in 2017 by the difference of two votes. After this they supported the start date in 2021, again by a marginal vote of one ballot. In the end, some committee members decided that the both decisions were too divided and the voting session was adjourned.

According to Reuters, Antonio Tajani, a vice president in the European Parliament and former European commissioner for industry, reportedly said the industry committee’s failure to adopt a position meant the Commission’s proposal, which he described as a balance between the needs of industry and climate policy, stood. But other politicians said it was more likely than ever that the environment committee next month would overwhelmingly back 2017 and it was remarkable that even the relatively conservative industry committee had failed to agree on 2021.

 

(Image: European flags in front of the Berlaymont building, headquarter of the European Commission, Brussels, Belgium. Photo credit: TPCOM/Flickr)