5 May 2015

The European Council and European Parliament today reached an agreement on the introduction of a Market Stability Reserve. The agreement – part of the continued reform of the EU ETS – needs to be endorsed by the Committee of Permanent Representatives and by MEPs in the European Parliament's Environment Committee and eventually by all MEPs, on the basis of a consolidated text which will then be formally adopted by the Council. 

“IETA welcomes the agreement that Europe’s policy-makers have reached on the Market Stability Reserve. We are pleased to see that this crucial reform to the EU ETS will be introduced before 2020 and that surplus allowances will be placed into the MSR, instead of returning them to the market at the end of the current trading period which would have caused disruption in the market.

“Today’s compromise agreement is another step to restoring the credibility of the EU ETS and ensuring that an efficient and effective carbon market system remains at the heart of Europe’s climate change response.”

For further enquiries, please contact Sarah Deblock on deblock@ieta.org

FOR IMMEDIATE RELEASE
Contact: Katie Kouchakji, kouchakji@ieta.org

South Korea ETS start kicks off crucial year for markets, says IETA

GENEVA, 12 January – The start of trading in South Korea’s emissions trading system (ETS) today is the first step in an important year for carbon markets and climate change policy, says IETA.

The country’s ETS, with a cap of 1.7 billion tonnes of CO2 equivalent1, came into effect on 1 January, and trading started today on the Korea Exchange (KRX).

“The start of South Korea’s ETS is a significant milestone for Asia, marking the first national carbon market in the region,” says IETA President and CEO Dirk Forrister. “It also adds to the momentum for establishing a solid foundation for market-based solutions in the international climate agreement set to be agreed at the end of this year.”

Forrister adds: “At the IETA Pavilion at the UN negotiations in Lima last month, we heard the South Korean government say its desire for the ETS was driven by a need to cut greenhouse gas emissions efficiently, not just for the sake of having a price on carbon. Markets continue to offer the most flexibility and lowest-cost solutions for reducing emissions, which is why we have seen governments from the EU to California to China adopt market mechanisms as the policy tool of choice.” 

“The launch of Korea’s ETS is timely as the Paris climate agreement this year could help facilitate linkages between these various trading systems,” says Jeff Swartz, IETA’s Director of International Policy. “This would allow governments like Korea to be more ambitious in the level of emissions reductions sought while lowering costs for business through enhanced flexibility and common accounting frameworks.

“IETA has submitted technical proposals to the UNFCCC on this topic, and we continue to actively engage with the international climate negotiations to ensure that our members’ voices are heard and that business is represented at this crucial time in policy-making,” Swartz says.

NOTES

¹ The South Korea ETS applies to emissions from the power sector, industry, transport, waste and buildings. For more information about the programme, please view IETA’s case study on the Korea ETS or view IETA’s GHG Market Report 2014.

WASHINGTON, DC (October 2, 2013) – Today, at the Carbon Forum North America conference, IETA released its anticipated California Emissions Trading Master Agreement (CETMA), which will be available for use by the secondary market participating in the California Carbon Market.

The CETMA was drafted under IETA’s stewardship by a special committee led by Baker & McKenzie LLP, and incorporates perspectives and expertise from many of the largest firms operating within the California carbon market today.

“The CETMA builds upon IETA’s successful International Emissions Trading Master Agreement,” said drafting committee chair Richard Saines of Baker & McKenzie, “but it deals with a number of secondary market trading issues specific to California’s unique AB32 compliance market, including offset invalidation, holding limits, registry and tracking system mechanics, and the buyer liability provisions under the California rules.”

IETA’s President and CEO, Dirk Forrister expanded on the value of the CETMA, stating, “with the standardized contractual provisions the CETMA provides, we expect to see increased market liquidity and transparency.  We’re very pleased with how this document has turned out, and look forward to releasing it to the market.”

The CETMA release was announced at a special press conference during Carbon Forum North America.  The conference brings people together from across a wide range of industries – the common thread is a recognition of the need to manage and reduce greenhouse gas emissions and the preference for doing so through the power of markets.

Online access to the CETMA: http://www.ieta.org/trading-documents

Download the press release here.

Press Release
24 September 2009

Contact: Henry Derwent derwent@ieta.org

Yesterday’s decision by the European Court of First Instance (CFI), to annul the European Commission’s decision to reduce the number of allowances in some EU Emissions Trading Scheme Phase 2 National Allocation Plans, has potentially serious consequences for the scheme, and for EU leadership in global climate policy in the runup to the Copenhagen UN negotiations.

It is well understood that the success of the second phase of the EUETS, and the avoidance of the over-supply that caused problems for the first, was the firm control exercised by the European Commission on national authorities’ proposals for emissions requirements. It now appears that the implementation of this control was not sound based in law, a prospect that opens up the possibility of considerable additional supply coming onto the market in an uncoordinated manner. Such an outcome would be contrary to decisions properly taken by the European Council about the level of European emissions reduction ambition.

IETA calls on the Commission to confirm as soon as possible that action will be taken to mend this apparent hole in the fabric of the EUETS and, potentially, in the contribution that the ETS was intended to make to Europe’s targets for 2020. The reaction of the market so far has been moderate, reflecting its confidence that such action will be taken, and that assumptions on supply which have underpinned the market for some considerable time will be re-confirmed. The Commission must also confirm that Phase 3 of the EUETS, based on different legislation, will not be affected. We also call on all Member States to hold back from attempting to make use of a loophole that simply has to be closed for the carbon market, and European climate policy, to continue on a sound footing.

Without early clarification of how one of the key parameters of today’s market will be re-established, there is a danger of a real loss of confidence and a reduction in the effectiveness of the emissions market that Europe rightly considers to be the centerpiece of its successful climate policy.