EU’s Environment Committee passed a series of changes to the Emissions Trading System

On 15 December, the European Parliament’s Environment Committee passed a series of changes to the Emissions Trading System, a majority of which would come into effect after 2020.

These include:

• Measures to speed up the removal of pollution permits from the market.  The committee agreed to increase the annual linear reduction factor from 2.2% to 2.4% in an effort to better address the EU’s long term decarbonisation objectives.
• Doubling the take-out rate of the Market Stability Reserve (MSR) from 12% to 24% for the period 2019-2022 to reduce the EU ETS surplus.
• Cancelling 800 million allowances from the MSR in January 2021.
• Cancelling up to 200 million allowances.
• Transferring auction allowances to the innovation fund.

The Committee also agreed to increase the share of allowances to industries at risk of carbon leakage by 5%.

WindEurope welcomes the Committee decision as a step in the right direction. A similar level of ambition will be required in the Council for the structural reform of the ETS to genuinely deliver.

The passed reforms will now go to a plenary vote in February for final approval.