Brussels, 29/04/2016 (Agence Europe) - As preparatory work is intensifying in the European Parliament ahead of examination of the proposal for the reform of the trading scheme for emissions allocations (ETS) for the period after 2020, the ruling of the Court of Justice on Thursday 28 April, which could mean that the annual maximum amount of free allocations for the period until 2020 will be reduced, has set the cat among the pigeons.
The ruling, which invalidates the Commission's method of calculation, delights all those who have been arguing loud and long that free allocations to energy-intensive industries said to be exposed to the risk of carbon leakage are a bonus given to polluters (see EUROPE 11542). However, it worries those who fear that it might threaten the ETS itself by creating legal uncertainty.
Legal uncertainty. In the European Parliament, Ian Duncan (ECR, UK), the rapporteur on the reform of the ETS, who is preparing a draft report to be presented to the environment committee in mid-June (15-16 June), is alarmed. “We suddenly find ourselves in legal limbo at a time of critical importance to the Phase IV reform” (2021-2030), he laments. He issued an immediate call to the Commission “to clarify the situation as quickly as possible”.
The Parliamentary committee vote is scheduled for 8 December 2016 and voting by the full Parliament for February 2017.
Bas Eikhout (Greens/EFA, Netherlands), group spokesperson on climate, says that this Court ruling is confirmation of what the Greens have been saying, that the allocation of emissions is over-generous and has been a primary cause of the market surplus. “This ruling is good news for the EU's ailing carbon market. We call on the Commission to immediately act on this ruling. A number of half-measures have been taken to reduce the glut of carbon emissions allowances circulating but decisive action is needed to restore the purpose of the ETS, which is the EU's flagship policy on climate change”, he said. (Original version in French by Aminata Niang)