Brussels, 21/01/2014 (Agence Europe) - Draft legislation is expected to be published by the European Commission on Wednesday 22 January as part of its climate and energy policy to 2030 to deal with long-term reform of the carbon market and sustainably solve the structural shortcomings of the EU's carbon market and carbon-trading system, ETS (see EUROPE1098). At this stage, at least, this will be the only legally binding proposal.
In order to stem the over-allocation of emissions quotas, that has caused a slump in the carbon price and undermined the effectiveness of ETS, the main tool for reducing greenhouse gas emissions at the lowest cost, the Commission is preparing to unveil a permanent market stability reserve (quotas held in reserve).
This would enable the Commission to put up to 12% of excess quotas in reserve each year from 1 January 2021 (the start of the fourth trading period for the ETS), calculated from the verified volume of quotas in circulation two years before, as long as there are at least 100 million quotas too many. A contrario, if fewer than 400 million quotas are in circulatoin, the Commission could add up to 100 million quotas from the reserve. The proposals would continue a short-term change introduced by the EU recently (see EUROPE 10993) to freeze 900 million excess quotas at the start of the third ETS trading period (2013- 2020).
Reducing emissions by 40%. It is likely that the Commission will unveil a greenhouse gas emissions reduction target of 40% for 2030 compared with the 1990 level. The president of the European Commission, José Manuel Barroso, along with most of the European commissioners, back this. Five commissioners, including Energy Commissioner Günter Oettinger and Industry Commissioner Antonio Tajani, want a 35% target. The Commission is expected to unveil a 27% objective for renewables at EU level, but this would not be binding on the member states, and no objective for energy savings until the EU energy efficiency directive is adjusted. There will be a simple recommendation providing common principles for the exploration and exploitation of shale gas that respects the environment and is profitable, and a report on the cost-efficiency of energy. On Monday 20 January, Luxembourg joined the countries wanting ambitious targets for renewables, joining the ranks of Germany, France, Austria, Belgium, the Netherlands, Italy, Portugal and Ireland. An email to this effect has been sent by Luxembourg's economy minister Etienne Schneider and environment minister Carole Dieschbourg to Commissioners Hedegaard and Oettinger. (AN/transl.fl)