Brussels, 24/01/2013 (Agence Europe) - The planned reform of the European carbon trading system through the temporary withdrawal of 900 tonnes of CO2 emissions quotas, which is currently being negotiated by the EU institutions, is causing division at the European Parliament's environment committee, chaired by Mattias Groote (S&D, Germany), the EP's rapporteur on this issue.
On Thursday 24 January 2013, the environment committee discussed amendments to the European Commission's proposal to adjust the ETS Directive 2003/87/EC to postpone the auctioning of 900 tonnes of emissions and, in a heated debate, there were clashes between those calling for rapid approval of the withdrawal, seen by the Greens/EFA, some Social Democrats and the ALDE as urgently needed to prevent the collapse of the carbon trading scheme in Europe due to falling carbon prices (see EUROPE 10770), and those fiercely opposed to the idea (EPP, ECR and some of the S&D), who talk about system failure and criticise the negative impact of climate policy on the European economy and competitiveness and refuse to give the European Commission a blank cheque to interfere with the market. On the same day, the EP's industry and energy committee voted through an amendment rejecting the Commission's proposal, which drove the Greens to describe Thursday 24 January as a black day for the climate. After the debate, Mathias Groote said that a consensus had not been achieved, but he would be unveiling a draft compromise in the hope that agreement would be reached on a reasonable solution at the environment committee meeting on 19 February.
During the debate, Eija-Riitta Korhola (EPP, Finland) said that the ETS had failed and the EU's climate policy was exorbitantly expensive. She said an intervention price could jeopardise economic recovery, jobs and competitiveness and the amendment would enable the European Commission to manipulate the market, creating uncertainty and increasing carbon leakage. Postponing the auctioning of the quotas will not affect carbon prices, she said, but will certainly lead to hikes in fuel prices at this time of crisis. With this reform, the price per tonne of carbon would rise from €5 to €10 but, she pointed out, only a price between €40 and €50 could push companies to invest in other energy sources. She said long-term predictability was needed in order to have an element of certainty. Martin Callanan (ECR, UK) drove the nail home further, saying that it was because of the ETS that an aluminium plant in his region had been relocated to Canada. He stressed that the EU was alone in thinking that everyone would follow suit, and commented (our translation throughout): “Obama has said some fine things. We shall see whether they act upon them. In Congress they are not keen to move forward. The American economy is booming thanks to shale gas”. Pieter Liese (EPP, Germany), on the other hand, considered that the credibility of the European Parliament is at stake and that refusal of the reform would not be coherent, especially as, in Council, the German position will not be a “no”.
Chris Davies (ALDE, UK) said that this temporary freeze of quotas was no more than a trifle and expressed surprise that it was giving rise to such huge political debate. The reason is that it is being used as a Trojan horse for attacking the ETS and anything else that combats climate change. He railed against the argument put forward by those who deem that the Commission is going beyond its area of responsibility. He said that was wrong because the amendment to the directive will be brought in by co-decision and that the European Commission is the ETS regulator. One may speak of investment uncertainty, he went on, adding that it is the lack of long term vision that creates the most uncertainty. In response to Korhola, Bas Eickhout (Greens, Netherlands) asserted that, if one wants to be rid of the ETS then one must say so, rather than use bogus arguments. He went on to deplore the fact that the Council is “further ahead than us” (France, Spain and Italy support the Commission's proposal; the United Kingdom wants to go further; and Germany's stance is pending). Tadeusz Cymanski (ELD, Poland), who is shadow rapporteur, spoke of unemployment especially among young people and called on Europe to show proof of realism. He sounded a note of caution saying: “One cannot be detached from economic and social reality. The EU is an isolated pioneer. Australia and California say it is important but nothing follows!”
The “no” from the ITRE committee was severely criticised by the Greens. Yannick Jadot, who is a member of the energy and industry committee, said: “Rejection of the Commission's proposal to intervene on the timetable for CO2 quota bids in order to improve effectiveness jeopardises one of the main tools of European climate policy. That shows the refusal to direct the European economy to greater energy sobriety, to the renunciation of energy independence, the impossibility of answering the major long term structural stakes of industry, and forgetting European commitments for aid to adaptation to climate change”. (AN/transl.fl/jl)