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.
- 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.