Brussels, 19/05/2015 (Agence Europe) - The EU member states would like the Market Stability Reserve (MSR) to begin in 2019. Their wish to sustainably reform the Emissions Trading Scheme (ETS) in an effort to rectify the surplus of 2.1 billion allocations on the European carbons market as soon as possible, was confirmed on Wednesday 13 May.
Member state permanent representatives meeting at Coreper endorsed the informal agreement reached on 5 May by negotiators from the Parliament, Council and the Commission on setting up a market stability reserve in 2018, which will be up and running by 1 January 2019, two years earlier than proposed by the European Commission (see EUROPE 11309).
Kaspars Gerhardts, the acting president of the Environment Council, was pleased with this development and said “it was a priority for the Latvian Presidency to establish the Market Stability Reserve in order to improve the operation of the carbon market in the EU. This is certainly a success”.
The European Parliament's Environment Committee still needs to confirm the agreement on 26 May, before the plenary session can adopt the Council of the EU text in July.
By approving the agreement, Coreper endorsed the following points:
The 900 million allowances backloaded last year (whose auctioning was deferred from the years 2014-2016 until 2019-2020) will be placed in the market reserve;
The 600 million unallocated allowances reserved for new market entrants or from closed industrial plants will be transferred directly to the MSR in 2020 and their future usage is to be considered under the wider ETS review for which a Commission proposal is expected this summer;
the “10% solidarity component” of allowances from the scope of the MSR for Central and Eastern European countries will not be transferred until the end of 2025;
The ETS review is to consider the possible use of a limited number of allowances before 2021 to supplement existing resources to promote CCS, renewables and low carbon industrial innovation projects;
The EU ETS and MSR reviews to take into account carbon leakage and competitiveness aspects, as well as employment and GDP related issues. (Aminata Niang)