Parliament lead Committee gives unclear support to ailing EU carbon market

Climate action

European NGOs WWF and CAN Europe today cautiously welcomed the European Parliament Environment Committee’s support for the proposal to temporarily curb the oversupply of emission allowances in the EU emissions trading scheme (ETS), a process known as “backloading”. However both regret that the Parliament included measures to weaken this support in its position.

The backloading proposal will go some way toward mitigating the severe problems faced by the EU’s carbon market, but deeper reform of the ETS is urgently needed.

EU climate policy officer for WWF, Sam Van den plas, said:”Today the ailing EU carbon market was given emergency treatment, as a temporary first step towards structural reforms of the carbon market. Parliament must ensure that it does not let the air out of the ambulance’s tires now. Handing out more blank cheques to energy intensive industries is unnecessary and irresponsible.”

In today’s vote, a set of compromise amendments gained cross-party support, reconfirming the EU Commission’s mandate for a one-off intervention in the carbon market. However, the amendments also contain provisions for a dedicated fund to compensate energy intensive industries, as well as a more generous definition for the sectors at risk of carbon leakage. NGOs warn these additional amendments introduce excessive loopholes and could unnecessarily complicate further negotiations with EU Member States and the Commission.

Julia Michalak, CAN Europe climate policy officer, said:”MEPs are trying to have their cake and eat it too. The backloading compromise adopted today is nothing like the proposal made by the Commission last summer. Backloading is now as full of holes as a Swiss cheese.”

CAN Europe and WWF now call on the full European Parliament and EU governments to swiftly support both the ETS backloading proposal while closing loopholes for energy intensive industry, and to adopt structural reform measures to ensure the ETS can stimulate innovation, create good jobs and move us off increasingly costly and unsustainable fossil fuels.

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