Cli­mate change: Par­lia­ment approves meas­ures to sup­port car­bon per­mit prices

“I am pleased that we man­aged to con­vince our col­leagues that back­load­ing is abso­lutely neces­sary for our emis­sions trad­ing scheme to meet its object­ives,” said Mat­thi­as Groote, who is steer­ing the legis­la­tion through Par­lia­ment, after his report was adop­ted by 385 votes to 284, with 24 absten­tions. ​“The ETS is not here to harm our industry, on the con­trary. It rewards innov­a­tion and effi­ciency by put­ting a price on car­bon. But it needs to deliv­er a clear price sig­nal. Exchanges at the cli­mate con­fer­ence in Warsaw last month high­lighted that car­bon mar­ket schemes are now at a turn­ing point. It is there­fore para­mount that we let the EU ETS reach its matur­ity,” he added. Under Par­lia­ment’s amend­ment, already agreed with mem­ber states, the European Com­mis­sion may, in excep­tion­al cir­cum­stances, adapt the tim­ing of auc­tions, provided an impact assess­ment shows that the sec­tors con­cerned will not face a sig­ni­fic­ant risk of com­pan­ies relo­cat­ing out­side the EU. The Com­mis­sion will only be able to make one such adjust­ment, up until 2020, cov­er­ing a max­im­um of 900 mil­lion allow­ances. Since its cre­ation in 2005, the Emis­sions Trad­ing Sys­tem (ETS) has set an over­all emis­sions ceil­ing which is gradu­ally being reduced over the long term. By 2020, emis­sions from indus­tri­al sec­tors covered by the ETS will be 21% lower than in 2005. Beneath this ceil­ing, com­pan­ies receive or buy cred­its auc­tioned by mem­ber states. One cred­it cor­res­ponds to one tonne of CO₂ emis­sions. Com­pan­ies may also sell on unused cred­its. Lim­it­ing the sup­ply of cred­its ensures that they retain value, so the scheme rewards com­pan­ies that invest in lim­it­ing emis­sions, thereby tack­ling cli­mate change. The grow­ing sur­plus of emis­sion allow­ances – due to over­sup­ply and the eco­nom­ic slow­down – has seen the car­bon price fall well below levels estim­ated when the ETS was cre­ated. The European Com­mis­sion there­fore pro­posed meas­ures to enable it to ​“back­load” – or delay — the tim­ing of a por­tion of the cred­its to be auc­tioned.

Next steps

The Coun­cil of Min­is­ters is to vote on the legis­la­tion at its meet­ing on 16 and 17 Decem­ber. The meas­ures to cor­rect the car­bon mar­ket can then be imple­men­ted by the Com­mis­sion under powers del­eg­ated to it. Source: European Parlament