BRUSSELS, 1 March - IETA welcomes European environment ministers’ adoption of a position on the EU ETS reform, and urges the European Parliament and Council to finalise work on the EU’s carbon market review promptly.
Environment ministers agreed yesterday evening to double the rate at which the Market Stability Reserve withdraws surplus allowances from the market for five years, and from 2024 onwards to annually cancel a number of allowances held in the Market Stability Reserve. That number would be the difference between the number of allowances in the reserve and the number of allowances put for auctioning the previous year.
They also approved a decrease in the share of allowances to be auctioned by 2% and agreed that partial compensation for indirect EU ETS costs by Member States is desirable. Such measures further strengthens the protection of European industry against the risk of carbon leakage.
“IETA is pleased that the Environment Council endorsed measures we have been supporting, such as doubling the Market Stability Reserve intake rate, combined with increased protection for European industry at risk of carbon leakage,” Dirk Forrister, CEO of IETA, said today.
“As the European Parliament and the Council share views on these key matters we are hopeful that work on the EU’s carbon market reform can be completed soon”.
“Yesterday’s decision is a big step towards finalising work on market reform that aims to strengthen the system for years to come,” said Julia Michalak, IETA’s EU Policy Director. “The doubling of the MSR’s intake rate will help deliver a smooth transition over time and a better balance between supply and demand."
“These reforms put Europe in good company. Many other jurisdictions are taking action this year. From California to Korea, China and Canadian provinces, governments are developing their own market programs to deliver their commitments to implement the Paris Agreement and maintain their own competitiveness,” Forrister said.