The European Parliament and Council have today reached a provisional agreement to revise the EU Emissions Trading System (EU ETS) for the period after 2020. This revision will contribute to put the EU on track to achieving a significant part of its commitment under the Paris Agreement to reduce greenhouse gas emissions by at least 40% by 2030.  The EU Emissions Trading Scheme puts a cap on the carbon dioxide (CO2) emitted by more than 11,000 installations in the power sector and energy intensive industry through a market-based cap and trade system. The deal includes:-

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 surplus of CO2 emission allowances in the European Union’s Emissions Trading System (ETS) started declining in 2015. This is the first significant decrease since unused allowances started accumulating in 2008. However, the surplus remains substantial, according to the European Environment Agency’s annual report on the EU’s emissions cap and trade system published today.

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).