Britain wants deeper reforms to the EU ETS than proposed by European Commission
Britain wants deeper reforms to the EU Emissions Trading System (ETS) than those proposed by the European Commission and Germany.
Britain said major changes are needed to help businesses cut emissions, to protect them from foreign competitors, and foster investment in low-carbon technology. The UK is asking for bold and comprehensive reforms to restore the ability of the EU ETS to drive cost-effective emission reduction and low-carbon investment.
The Commission, the EU executive, has proposed launching a so-called market stability reserve (MSR) from 2021 to regulate the supply of allowances in the ETS, the bloc’s main weapon to combat climate change. The MSR aims to expedite the shrinking of a surplus of more than two billion permits, which has knocked EU carbon prices to around 6 euros per tonne from more than 30 euros in 2008.
Britain has not formally backed the MSR but has pointed out that the sooner reform takes place, the sooner the ETS can be restored as an effective policy.
The MSR can potentially help but it is not the comprehensive change we urgently need to tackle the surplus, said a spokeswoman for Britain’s Department of Energy and Climate Change. Instead, Britain said it wants to cancel permanently a significant number of the surplus permits, without specifying a figure or range.
The Commission is keen for lawmakers to treat the reform separately from potentially lengthier talks on the 2030 targets to ensure it can be passed into law early next year. But some EU nations believe the issues are closely connected and best tackled together.