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EURELECTRIC welcomes the outcome of today’s vote in the European Parliament’s Plenary on the revision of the EU ETS for the period after 2020. The vote includes a number of important measures aimed at strengthening the EU ETS, such as doubling the intake rate of the Market Stability Reserve to 24% (2019-2022), cancelling 800 million allowances from the Reserve in 2021, and addressing the interaction of the ETS with other EU climate and energy policies.
“The vote today is an important step towards strengthening the EU ETS and delivering a stronger carbon price in the short and medium term,” said EURELECTRIC Secretary General, Kristian Ruby. “However, the decision to keep the linear reduction trajectory at 2.2% fails to ensure longer term investor certainty and to signal higher EU decarbonisation ambition in the 2050 perspective.”
“It will now be crucial for the Council of Ministers to agree on an ambitious position that supports the measures adopted today by the Parliament, and also brings the ETS in line with the EU’s Paris Agreement commitments,” he added.
EURELECTRIC welcomes the fact that the vote includes a number of amendment proposals aimed at future-proofing the EU ETS and to align it with the review cycle agreed under the Paris Agreement. These are important as they provide more certainty and predictability to the system.
However, EURELECTRIC believes that further work will be needed to find appropriate compensation for Member States with high carbon intensity and low GDP/capita levels that will be faced with significantly higher investment needs than they would under the Commission’s proposal. The governance of the Modernisation Fund should be simplified, and controlled primarily by the beneficiary Member States, to support low carbon investments in eligible Member States that are cost-efficient and contribute to the long term decarbonisation objective.
EURELECTRIC also believes that following the recent publication of the Clean Energy Package, consistency and coherence between the various climate and energy targets for 2030. European policies and implementing instruments should be complementary and avoid undermining the overall economic efficiency and environmental effectiveness of the EU ETS. A comprehensive assessment of the impact of various measures on the ETS, including the proposed energy efficiency target, should therefore be conducted.