EURELECTRIC welcomes the provisional agreement on EU ETS reform that will strengthen the European carbon market up to 2030 and strongly urges the EU institutions to proceed with its confirmation as soon as possible.
“Investors across Europe have received the much needed legal clarity that will enable them to take better informed decisions on low-carbon investments,” said EURELECTRIC Secretary General, Kristian Ruby. “The deal sends a timely message of EU climate leadership that coincides with the ongoing COP23 climate conference in Bonn. It also restores confidence in the long-term functioning of the EU ETS in time before the entry into operation of the MSR,” he added.
EURELECTRIC is particularly pleased to see that the measure to double the MSR intake rate is now a concrete part of the agreement. Furthermore, the measure to cancel those ETS allowances which are above the previous year’s auctioning volume, already from 2023, is an important signal of the EU’s commitment to address the toxic oversupply of allowances. We now expect a more dynamic adjustment measure to be implemented in the context of the Energy Union Governance Regulation. Such a measure would ensure that any possible future surplus stemming from policy overlaps will be addressed in a rules-based manner.
EURELECTRIC also welcomes the fact that a top-down command and control measure such as the EPS was ultimately rejected in the design of the Modernisation Fund. However, as there was no agreement on increasing the size of the fund, we believe that in order to ensure a cost-effective energy transition across Europe, the next EU MFF should create a just energy transition fund to assist those countries and regions with high carbon generation intensive assets.
Finally, we repeat our call for the EU to take the necessary action to bring its decarbonisation ambition in line with the Paris Agreement objectives. This must place the European economy on a cost-effective pathway towards accelerating its decarbonisation up to 2050, including specifically, by increasing the EU ETS Linear Reduction Factor up to at least 2.4% at the earliest possible opportunity.
Background information: EURELECTRIC recently published its position on the Post-2020 Multiannual Financial Framework.