Brussels, 19/06/2013 (Agence Europe) - From the irreversible coma in which it lay, the proposed short-term reform of the emission quotas trading system (ETS) of the EU was brought back to life, in Brussels on Wednesday 19 June, with the compromise reached by the committee on the environment of the European Parliament (ENVI), which is chaired by Matthias Groote (S&D, Germany), on a text with a few minor amendments. The members of the parliamentary committee narrowly gave their green light (35 votes to 33) to the proposal aiming to postpone the auction timetable by temporarily freezing 900 million surplus quotas at the start of the third trading period of the ETS (2013-2015). The consolidated amendments which were acceptable to the EPP, the Social Democrats and the Liberals allowed this step forward to be taken at the second vote of the MEPs on a text returned to them by the plenary session on 16 April of this year.
Essentially, the modified text aims to guarantee that the intervention of the European Commission on the carbon market in order to rebalance supply and demand will be the only one and will concern a maximum of 900 million quotas, and that the quotas temporarily withdrawn from the market (backloading) will be reintroduced in a predictable and linear way one year after the last withdrawal from the market and by no later than 2020. The MEPs also want the revenue generated by 600 million quotas to be allocated to an eco-innovation fund to encourage investments in green, low-carbon technologies and renewable energies, in order to support demonstration projects, together with measures designed to reduce the costs and emissions of carbon from energy-intensive and high-carbon industries by 2020, to prevent them from moving out of Europe. The MEPs believe that the European Commission should be given a mandate to manage the use of this fund, as it does for the NER 300 fund (see EUROPE 10869).
The ball is now in the court of the plenary session, which will vote on 7 or 8 July. The text will be put to it without amendments, explained Matthias Groote, the author of the initial report on this dossier, thanking the MEPs from having shown a spirit of compromise. “We now have broader support for a solution which will allow the ETS to play its part. I believe that the Parliament will adopt our suggestions and that we will be able to start negotiations with the Council in July”, he said. Before the vote, the attempt by Eija Riita Korhola (EPP, Finland), the shadow rapporteur, to ensure that the vote of the committee on the environment would not bind the EPP Group at the plenary session, failed.
Austria's Richard Seeber, spokesperson of the EPP Group within the committee on the environment, welcomed the fact that the compromise reached paves the way for the ETS to remain the principal instrument to fight climate change. “We do not want to see 27 national systems springing up like mushrooms”, he said.
NGOs circumspect. The environmental NGOs, such as WWF and CAN Europe (Climate action Network Europe), heaved half a sigh of relief, whilst stressing the urgent need for structural reform of the ETS and lamenting the fact that “more blank cheques” are being written out for the energy-intensive industries, a provision which they feel is “unnecessary and irresponsible”. The proposed short-term reform of the ETS aims to remedy the shortcomings of the system caused by an overallocation of quotas, which led to plummeting carbon prices: €3 today instead of the €20 or €30 initially anticipated. The surplus of quotas, which stood at 1.2 billion in 2012, has risen to 2 billion today. (AN/transl.fl)