In Strasbourg on Tuesday 6 February, the European Parliament reached one more milestone towards formal adoption of the European directive that will reform the EU’s emissions trading system (ETS) for the period 2021-2030, in order to make it more effective and allow the EU to implement the Paris climate agreement.
A large majority (535 for, 104 against with 39 abstentions) of the European Parliament approved the provisional interinstitutional agreement reached on 9 November 2017 on the reform which aims to strengthen ETS while safeguarding the competitiveness of European industry (see EUROPE 11914, 11910).
The ETS, a market instrument, is also the EU’s main mechanism for reducing greenhouse gas emissions in the most affordable way and for reaching its objective: reduction of emissions by at least 40% by 2030 compared with 1990.
The reform approved is not yet a cure-all solution but the compromise found will make it possible to remedy dysfunction on the European carbon market and promote transition towards a low carbon economy by stimulating innovation, all the main political groups said.
“The ETS is certainly not perfect but despite this, it remains the cornerstone of our policy to combat climate change. The system had been greatly criticised as the price of carbon had fallen too low to be able to guarantee the market would work properly. It was necessary to strike the right balance between our environmental ambitions and protection of our industry. The debate is still ongoing”, said Julie Girling (ECR, Britain), who is rapporteur on this issue, during the debate the day before voting.
Ivo Belet (EPP, Belgium), shadow rapporteur, found the agreement “ambitious and realistic”. He said it will allow companies in the energy sector to move towards sustainable production and to avoid relocation of European industries to “where standards are less strict”.
Speaking on behalf of ALDE, Gerben-Jan Gerbrandy of the Netherlands underlined the fact that, thanks to Parliament, “the modernisation fund will not be used for thermal power stations”, saying that this is “one of the key improvements”.
Katerina Konecna from the Czech Republic, speaking on behalf of the GUE/NGL Group, welcomed “a good balance between climate protection and the protection of industry and jobs”, mainly with derogations allowing the metallurgy industry to be protected.
“Finally, we are working to do away with the surplus quotas!”, Bas Eickhout (Greens/EFA, Netherlands) was pleased to say. “The base is good but the time has come for member states to take national measures to complete this reform”, he said as, in order to have a functioning ETS, the price of CO2 per tonne should be “between €40 and €45”.
Expressing “scepticism”, Eleonara Evi (EFDD, Italy) nonetheless hoped she would be mistaken. “Is our aim to protect the climate or to create a monster of speculative financial wizardry? Are we truly applying the principle of polluter pays?”, she asked.
The commissioner for climate action, Miguel Arias Canete, was, for his part, delighted as he said the text provides “a good balance between strengthening the European carbon market and encouraging industries to reduce carbon, thanks to innovative solutions and renewable energies, while taking into account difficulties encountered by member states with low revenue when it comes to modernising their energy system”. He went on to add: “It is hoped that the market price will allow long-term investment to be encouraged”. (Original version in French by Aminata Niang)