The French Presidency of the Council of the European Union sent Member States, on Monday 20 June, a new draft compromise on the creation of a second EU Emissions Trading System covering emissions from space heating and road transport (‘ETS2’ or ‘ETS BRT’), with the aim of reaching a political agreement (‘general approach’) at the meeting of EU environment ministers on Tuesday 28 June, 2 days before handing over the Presidency to the Czech Republic.
On the basis of comments made at the last meeting of Member States’ ambassadors to the EU (Coreper) on Friday 17 June, the Presidency proposes three changes to the previous draft compromise (see EUROPE 12973/14).
The first would allow Member States to exempt entities covered by the ‘ETS2’ from surrendering emission allowances until 31 December 2030, if they are subject to a national carbon tax that is higher than the average allowance price in the ETS2.
Member States would also have the possibility to extend the ETS2 to other sectors, subject to prior approval by the Commission, and taking into account, inter alia, the effects on the internal market, potential distortions of competition and the environmental integrity of the ETS2.
In addition, the French text provides for the possibility to allow simplified monitoring, reporting and verification of emissions and allowances for regulated entities with annual emissions of less than 1,000 tonnes of CO2 equivalent.
Coreper will discuss the new draft compromise on Wednesday 22 June and may return to it on Friday 24.
However, according to a source close to the dossier, it is not expected that the discussions this week in Coreper will lead to an agreement on this issue “because it is part of a larger whole and it is a rather political decision”.
ETS2 is in fact a part of the wider ETS review and is directly linked to the Social Climate Fund (see other news).
While discussions on the review of the current ETS are well underway, divisions remain over ETS2 and the Social Climate Fund, another source confirmed (see EUROPE 12975/19).
See the new French compromise project: https://aeur.eu/f/289 (Original version in French by Damien Genicot)