Friday

29th Mar 2024

EU bulldozes through carbon trade reforms

  • Coal-dependent countries such as Poland trued to oppose the deal (Photo: Kris Duda)

Environment ministers agreed on a reform of the EU Emission Trading Scheme (ETS) on Tuesday (28 February), in a bid to bring the bloc in line with its commitments under the Paris agreement on climate change.

"It's a big success," said EU climate commissioner Miguel Arias Canete after the meeting. "A lot remains to be done but the spirit of Paris is with us."

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Only 19 of the 28 EU member states backed the ETS update despite the nice words.

Bulgaria, Italy, Croatia, Cyprus, Latvia, Lithuania, Poland, Romania and Hungary claimed throughout the day-long discussion that the overhaul would hurt their industries.

Some kept protesting even after the Maltese presidency declared a majority behind a compromise deal, as proposed by the Czech Republic.

"We feel fooled," said Poland's minister of environment Jan Szyszko.

ETS is the EU’s key policy for cutting emissions by at least 40 percent by 2030.

The scheme involves a market-based cap and trade system forcing 11,000 power-intense companies to hand in a carbon permit for every tonne of CO2 they emit.

The scheme was introduced in 2005 and initially worked well, but prices plummeted in the wake of the economic downturn, causing a glut of credits on the market.

Tuesday's deal would double the number of permits stored in the Market Stability Reserve (MSR), a sort of pool for surplus credits, and automatically cancel a number of MSR permits if their total number reached a certain threshold.

Such a solution was championed by France, Luxembourg, the Netherlands and Sweden.

However, ministers, under pressure from Germany, also said that well-performing industries could keep getting their carbon credits for free.

The EU Council went further than the European Parliament, which voted its stance on ETS two weeks ago.

The two institutions will now enter into negotiations, and hope to agree on a deal before the summer.

NGOs said the reform was not far-reaching enough.

Agnes Brandt, senior EU policy officer at Carbon Market Watch said: “Auctioning, not free handouts, is the default of a ‘polluter pays’ system. Companies have been using free pollution permits as a life support, thereby locking in emissions in Europe".

"Only smart policies leading to a strong carbon price signal will push industry to innovate and modernise, and guarantee their long-term global competitiveness," she added.

Brandt called on willing countries to implement complementary national measures to reduce emissions in Europe.

MEPs back limited EU carbon trade reform

The parliament backs reform plans for the EU's carbon trading scheme, but allow polluting industries to maintain some controversial benefits.

MEPs agree on future of emissions trading

The environment committee increased the ambition of the EU's flagship climate tool. MEPs call it a 'strong signal' after the global Paris deal.

Stakeholder

No ETS deal means it can still be strengthened

The EU Emissions Trading Scheme is the only feasible instrument at the European level to foster a cost-effective reduction of greenhouse gas emissions.

Opinion

EU Modernisation Fund: an open door for fossil gas in Romania

Among the largest sources of financing for energy transition of central and eastern European countries, the €60bn Modernisation Fund remains far from the public eye. And perhaps that's one reason it is often used for financing fossil gas projects.

Latest News

  1. Kenyan traders react angrily to proposed EU clothes ban
  2. Lawyer suing Frontex takes aim at 'antagonistic' judges
  3. Orban's Fidesz faces low-polling jitters ahead of EU election
  4. German bank freezes account of Jewish peace group
  5. EU Modernisation Fund: an open door for fossil gas in Romania
  6. 'Swiftly dial back' interest rates, ECB told
  7. Moscow's terror attack, security and Gaza
  8. Why UK-EU defence and security deal may be difficult

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

EU news that matters

Join us