emissions trading system

A review of the Emissions Trading Scheme is underway in the EU Council today (19.12.2016).  The discussions in Council follow a last-minute compromise on the way forward secured in the European Parliament’s environment committee last Thursday.  Final Plenary approval is needed in February 2017 for the formal negotiations between MEPS and Member States to get underway in the Spring for a deal to be found on the way forward.  One of the key problems that the European Commission’s proposal seeks to address is the problem facing the ETS scheme with a surplus of allowances that has built up in r

The European Commission launched a consultation on the functioning of the Auctioning Regulation governing the auctioning of emission allowances under the EU emissions trading system (EU ETS). As of 2019, the Market Stability Reserve is expected to lead to changes in annual auction volumes. Some technical amendments to the Auctioning Regulation are therefore needed. The consultation aims to collect stakeholders’ views on the technical aspects of the implementation of the Market Stability Reserve (Decision EU 1814/2015).

The Council of Ministers has backed changes to a series of environmental laws including the environmental impact assessment (EIA), fluorinated gases, the emissions trading system (ETS) and environmental accounts. The MEPs and the Member State representatives have reached agreement on the revision of the 1985 environmental impact assessment (EIA) directive in December last year.

The European Parliament has approved the “backloading” of CO2 permits. The plan freezes the auctioning of a portion of CO2 permits to boost their price and encourage firms to invest in low-carbon innovation. The measures, amended by the Parliament in July set stricter conditions for the freeze and are intended to restore the incentive effect of the Emissions Trading System, which is designed to curb CO2 emissions.

During an Environment Committee meeting attended by ENEP MEPs debated an implementation report put forward by CCS rapporteur Chris Davies (UK/ALDE).

An amended Commission proposal to include air transport within the Emissions Trading System was criticized by MEPs during a meeting of the Transport Committee. The original proposal was amended following talks at the International Civil Aviation Organization (ICAO) in Montreal. Emissions from outside the European Economic Area will be excluded but the deal still includes those within the EEA.

The main features of the amended proposals are:

Whilst there is general agreement between the Member States on the need for an EU wide CO2 emissions target for 2030, there is disagreement on renewable energy and energy efficiency targets. That was the message from EU Energy Commissioner Günther Oettinger following the Informal Energy Council that met in Vilnius.  But a recent unofficial Commission briefing sent to the Members States shows that consensus on everything except the 40% CO2 reduction goal is a way off.