EU ETS: ENVI Committee Voted On The Market Stability Reserve
EU Emission Trading System (ETS) ““ Market Stability reserve: On 6 May, Member States and European Parliament (EP) agreed to bring forward the start date of a Market Stability Reserve to 1 January 2019 and this agreement was also backed by the Environment Committee on 26 May. The proposed law would create a system that automatically takes a portion of ETS allowances off the market and into the reserve if the surplus exceeds a certain threshold. In the opposite scenario, allowances could be returned to the market. The surplus of emission allowances, which has been building up in the system since 2009, is estimated at over 2 billion.
Under the proposed deal, Ã‚Â« backloaded Ã‚Â» allowances (900 million allowances withdrawn from the market), would be placed in the reserve. Remaining allowances unallocated by at the end of the current trading phase (2020) should also be placed in the reserve, subject to an overall review of the ETS directive, to be tabled by the European Commission later this year. They also agreed that so-called “solidarity allowances”Â, amounting to 10% of the annual total and allocated to certain EU member states in Central and Eastern Europe, would be exempt from the reserve until 2025. The provisional agreement will be put to a vote at the 6-9 July plenary session in Strasbourg.