EU climate commissioner dismissive of France’s ETS price corridor idea, hints at non-ETS ‘flexibilities’

Published 11:36 on April 19, 2016  /  Last updated at 20:58 on April 19, 2016  /  EMEA, EU ETS  /  No Comments

EU Climate Commissioner Miguel Arias Canete has signalled his disapproval of France’s idea to establish an EU ETS price corridor through the modification of the MSR.

EU Climate Commissioner Miguel Arias Canete has signalled his disapproval of France’s idea to establish an EU ETS price corridor through the modification of the MSR.

“If you open a ‘floors and ceilings’ discussion in Europe, for some the floor would be the ceiling, [and] it would be an impossible discussion,” he told the EU Parliament’s environment committee in an exchange of views on Tuesday.

France wants to introduce in government EUA auctions both a reserve and ceiling price, forming a corridor that rises annually along a predetermined trajectory to provide a degree of certainty for ETS participants, investors, and governments.

The proposal has been met with cool reception so far from member states, with Germany saying it would prefer supply-side measures over price-based interventions.

But in a note to clients, Energy Aspects analyst Trevor Sikorski said that while the French proposal “has a long journey ahead, and at this time still feels unlikely to garner sufficient support in the council … [it] proposal cannot be ruled out completely.”

Meanwhile, France-based think-tank The Shift Project last week suggested the price corridor measure need not contradict with the “quantity-only” approach to the ETS reforms outlined by the European Commission to date.

NON-ETS PROVISIONS

Arias Canete reaffirmed that the Commission’s so-called Effort-Sharing proposal covering emissions in sectors outside the ETS would be delivered prior to the executive’s August summer break and that this would include land-use change (LULUCF).

In response to concerns by several MEPs that farmers may face a heavy burden, he said the proposal would respect the Oct. 2014 guidance laid down by the European Council.

He noted that this guidance explicitly linked the lower mitigation potential of agriculture and the need to optimise LULUCF’s contribution to emissions reductions, according to a summary of the meeting compiled by monitoring service One Policy Place.

He said there would be limited amounts, or a maximum, of CO2 that could be offset in other areas in relation to LULUCF, and that the Commission was also studying enhanced flexibilities to ensure member states that faced steep costs to meet their domestic targets could achieve less costly reductions elsewhere in the EU.

By Ben Garside – ben@carbon-pulse.com

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