After lengthy and difficult negotiations, today the all-party environment committee agreed on measures to reform the European Union’s Emissions Trading System (ETS).
The ETS is the cornerstone of the EU's policy to fight climate change and to reduce greenhouse gas emissions, established in 2005. It is currently in its third phase, during which an EU-wide cap on emissions (reduced by 1.74% each year) and a progressive shift towards auctioning of allowances in place of free allocation were introduced.
The report adopted today will establish the reforms demanded by the environment committee for the fourth phase - starting in 2021- which will then need to be adopted by the plenary of the Parliament and negotiated with the Council.
During the committee negotiations, S&Ds pushed for a more ambitious linear reduction in the overall cap, in order to reach our commitments under the Paris Agreement, for the cancellation of excess allowances which have kept the price of carbon far too low, and for all the revenues of the ETS being earmarked for climate purposes. It has also been a priority to improve the provisions for the temporary free allocation of allowances to Europe's industry, better reflecting sectors' capacity to further reduce emissions and supporting those most exposed to the risk of carbon leakage.
Miriam Dalli, S&D spokesperson on environment, said:
"We have always been committed to ensure a European ETS system that actually works; one that keeps climate change in check whilst ensuring our industry's competitiveness.
"It has been our fight from the very beginning to ensure an ETS that delivers the commitments made during the COP21 in Paris and makes sure that we achieve the 2050 climate objectives. This is the legislative tool that can help us turn fancy words into proper action and we will continue working to achieve the real change we need."
S&D shadow rapporteur for the ETS reform, Jytte Guteland MEP, said:
"I am delighted that we have finally reached an understanding for the ETS. The deal we have voted is a very ambitious one for the climate.
"This makes it possible for the EU to live up to last year’s Paris climate agreement - and even go beyond the proposal from the European Commission. It is the cornerstone for reaching future climate and energy targets on limiting climate change. I am particularly pleased that the linear reduction factor was increased to 2.4% and that shipping will also be included in the ETS, both priority issues for the S&Ds.
"The ETS is the best tool for making sure that Europe's industry manages the transition towards a fossil-free society and continues to be a world leader in low-emission production. With today's outcome, S&Ds have also ensured that there will be an instrument in place to mitigate any social consequences and support workers through this transition.
"This reform is crucial on so many levels - not only for today but also for the future. It is a step in the right direction and shows that Europe is serious about continuing on the successful path of combining reduced emissions with economic growth.
"But the final word for the ETS is yet to be said early next year. Now we have to make sure we can navigate the deal into harbour and take this important step to a sustainable future."
