15-Dec-2016 @ 13:15
Conservative Energy spokesman Ian Duncan's ambitious revisions to the European Union's Emissions Trading Scheme (ETS) have cleared a significant hurdle.
Members of the European Parliament's Environment, Public Health and Food Safety Committee today approved his report by an overwhelming majority and it is now expected to be considered by all MEPs in February.
ETS is the cornerstone of the EU’s policy to combat climate change and its key tool for reducing industrial greenhouse gas emissions cost-effectively. The first, and still by far the biggest international system for trading greenhouse gas emission allowances, the EU ETS covers more than 11,000 power stations and industrial plants in 31 countries.
Mr Duncan said: "Today the committee delivered a welcome Christmas gift to all who care about climate change.
"We have endorsed an agreement that honours our Paris commitments, while also protecting our vital industries. The journey has not always been easy but the commitment of my fellow MEPs who negotiated the dossier has been unstinting and I owe them all a debt of thanks.”
His proposals heighten ambitions to tackle climate change.
The Linear Reduction Factor (LRF) – which is the annual cut in carbon from 2021-30 - has been increased from 2.2% to 2.4%, which puts the EU on schedule to meet its long term 2050 emissions reduction target of at least 80% reduction of CO2.
In order to tackle the glut of allowances in the market – essentially permissions to pollute that industries can buy and sell - up to one billion allowances will be cancelled. Meanwhile, the Market Stability Reserve (MSR), which is a 'bank' to soak up and store excess allowances, will withdraw a maximum of 24% of allowances from the market each year for four years, instead of the current 12%.
“These measures will help deliver an effective carbon price that incentivises industry to innovate,” Mr Duncan said. “The top 10% best performing factories and other installations will receive all of their allowances free. We have also created a fund of up to 12 billion Euros to help industry innovate and invest in technology.”
The report is a balance between delivering a functioning market with a meaningful carbon price and aims to avoid so-called "carbon leakage" – the relocation of industries to countries outside the EU with less stringent climate change targets.
Scotland MEP Mr Duncan added: "The next step will be to try and secure endorsement by the entire Parliament, which will be a challenge of course. But after today's vote I have greater confidence in the outcome.
"Time now for the European Council to step up to the plate and get ready to bat for climate change."