The European Parliament’s negotiators for the revision of the European Union Emissions Trading System (ETS) will meet four times next week (Monday 2 May, Tuesday 3, Wednesday 4 and Thursday 5) in Strasbourg in the hope of reaching compromise amendments ahead of the vote on the dossier scheduled for 16 May in the Parliament’s Committee on the Environment, Public Health and Food Safety (ENVI).
In an online media interview on Tuesday 26 April, the Parliament’s rapporteur Peter Liese (EPP, Germany) acknowledged that “many different opinions” remain at the current stage of the negotiations. His colleague Michael Bloss (Germany), shadow rapporteur on this dossier for the Greens/EFA group, had made a similar observation a few days earlier (see EUROPE 12937/8).
However, their interpretations of the reasons for the lack of progress in the negotiations differ.
Mr Liese said that the blockage is mainly due to the fact that a majority of the ENVI Committee - comprising MEPs mainly from the Greens/EFA and The Left groups, but also some from the S&D and Renew Europe groups - is in favour of strengthening the Commission's proposal for the current ETS without having a “clear position” on the creation of a second ETS covering greenhouse gas emissions from heating of buildings and road transport (ETS2).
The Commission’s initial proposal for the ETS1 foresees a reduction in emissions from the sectors covered by the scheme of 61% by 2030 compared to 2005 levels, an increase of 18 percentage points compared to the current contribution (-43%) of the scheme to the EU’s climate target (see EUROPE 12762/1).
For the rapporteur, this is already a very demanding target which the Parliament should align itself with in order to prevent the prices of emission allowances in the ETS1 from becoming really too high and pushing up electricity prices even further.
“I am convinced that going beyond the Commission proposal will be really challenging and could create problem not only for industry (…) but also because the ETS1 directly affects electricity consumers”, he said.
In particular, it considers that some EU Member States will have to rely more on coal over the next two to three years to move away from their dependence on Russian gas, which will already lead to an increase in the price of emission allowances in the current ETS.
ETS2
Mr Liese, a supporter of ETS2, has passed on compromise proposals on this chapter to the negotiators of the other political groups.
In particular, he suggests a system to ensure that entities covered by the ETS2 limit the passing on of their additional costs (due to the ETS2) to final consumers.
This would require regulated entities to report to the European Commission the percentage of costs associated with the surrender of allowances that is passed on to the final consumer and to provide the Commission with an explanation where this percentage varies by more than 5 percentage points from the last reporting period.
Furthermore, they would not be able to pass on more than 50% of the costs of surrendering allowances under the ETS2 to the final consumer. Otherwise, they would be obliged to pay a penalty to the ‘Social Climate Fund’.
Mr Liese also proposes a system to cap the price of ETS2 emission allowances at €55. (Original version in French by Damien Genicot)