EU ETS reforms agreed by European parliament
MEPs have backed reforms of the EU’s emissions trading system, although the proposals have received a mixed response from industry and climate campaigners.
The draft measures were approved by 379 votes to 263, with 57 abstentions. MEPs supported the commission’s plans to reduce the number of carbon credits by 2.2% a year from 2021 to curb emissions. Under existing legislation, they would reduce by 1.74% a year. MEPs decided to keep the number under review with a view to increasing it to 2.4% from 2024.
MEPs agreed to double the capacity of the market stability reserve (MSR) to absorb the excess allowances on the market. An oversupply of free pollution allowances has been blamed for the plummeting price of carbon, leaving major polluters with little incentive to cut greenhouse emissions.
The MSR was agreed in 2015 and will remove surplus allowances when thresholds are breached, absorbing up to 24% of excess credits in each auctioning year, for the first four years. MEPs backed plans to remove 800 million allowances from the MSR on 1 January 2021.
Under the proposals, funds raised by auctioning ...