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Articles

ETS REFORM RAISES CONFLICTS WITHIN THE EU

Eastern and western EU member states argue about the ETS reform’s starting date.

Over the past years, Europe’s emissions-intensive industries have had the chance to benefit from the malfunctioning of the EU’s Emissions Trading Scheme (ETS), which permitted the over-allocation of allowances and carbon’s low price, and Eastern European countries - whose economies are dependent on them - already delayed the endorsement of a reform proposal that was meant to become effective in 2012 and was agreed to only in 2014.

These countries fear that any change within the ETS could raise carbon price and undermine their economy, and are taking position against any kind of public intervention in a market-based system.

New conflicts are now arising concerning the new ETS reform plan; in fact, all countries have agreed to the establishment of a market stability reserve into which deposit excess allowances when there are too many in the market, but a group of eight eastern states led by Poland wants the measure to be introduced as late as possible.

In 2014, the Commission proposed 2021 as the start date of the reform, and Poland wants to stick to this date, while a group of western member states is pushing for it to start in 2017; aiming at smoothing the dispute, the European Parliament’s environment committee opted for a compromise start date of 31 December 2018, and even the new Commission no longer supports its previous proposal.

However, the compromise date has convinced none of the members, and western states argue that waiting until 2019 will only hold down the carbon price and prolong uncertainty, raising costs for business and leaving consumers to pay the price.

 

The gLAWcal Team

EPSEI project

Monday, 9 March 2015

(Source: European Voice)