Measures to stabilise the EU carbon market will be introduced by the end of 2018 after a vote by MEPs.
The commission had suggested a 2021 start date for the reforms to the EU emissions trading system (ETS), but several member states, including the UK and Germany, had called for the proposed market stabilisation reserve (MSR) to begin in 2017.
MEPs on the European parliament’s environment committee voted for a compromise timetable, with the MSR in place by 31 December 2018.
Under the agreement, which still has to be ratified by member states, millions of ETS allowances will be withdrawn from the market and placed in a reserve in an effort to shore up the price. MEPs also supported a proposal to prevent the 900 million allowances withdrawn last year under the commission’s “backloading” mechanism re-entering the market in 2019 as originally planned.
The decision to introduce the MSR three years ahead of the commission’s proposed start date was welcomed by campaigners. Bryony Worthington, founder of emissions pressure group Sandbag, described the vote as a “game changer”. “These amendments represent a massive improvement on the commission proposal,” she said.
Catherine Bearder, MEP and environmentalist columnist, said: “These crucial reforms will permanently plug the hole in the EU’s carbon market and boost long-term green investment.”
However, in a joint ministerial statement issued ahead of the committee’s meeting, energy and climate secretary Ed Davey and his counterparts in eight member states, said the MSR should begin in 2017, arguing that an early start was needed to provide the certainty required by investors to fund the creation of a low-carbon economy.
They said: “We cannot wait until 2021. By that time, the level of surplus in the ETS is likely to be significantly higher, with the resulting risk that critical low carbon investments needed this decade, are further postponed into the future.”
