Senior MEPs from the two biggest political groupings have struck a compromise deal on how to strengthen the MSR, two weeks ahead of a crunch vote in the EU Parliament’s environment committee.
The compromise proposal has the MSR starting by the very end of 2018, earlier than the 2021 date proposed by the European Commission and has several other elements that strengthen the MSR from the original proposal.
News of the proposal pushed prices up to a close of €7.46 by the close, its highest finish since December 24. The centre-right EPP party, the biggest in the parliament, had previously only been publicly willing to start the MSR in 2021.
The proposal would:
- put the 900 million backloaded allowances directly into the reserve, otherwise these EUAs would return to the market via auctions over 2019 and 2020.
- put unused allowances from the ETS new entrants reserve, expected to run to several hundred million EUAs by 2020, directly into the MSR.
- set aside 300 million MSR units for an innovation fund, if the backloaded and new entrants allowances there amount to more than 400 million
- Leaves unchanged the Commission’s thresholds for when the MSR would be filled and emptied- 833 million and 400 million respectively.
- Cut the timelag between calculating the number of EUAs in circulation and the transfer/release of the MSR to one year, from the two year period proposed by the Commission.
The compromise proposal was endorsed by the EPP’s Peter Liese and the Socialists’ Matthias Groote, co-ordinators of the two largest groups in the parliament which together have a majority of the MEPs that will vote in the Parliament’s environment committee on February 24, according to Bloomberg.
All party co-ordinators will put the proposal before their MEPs next week. Parliamentary sources told Reuters that support was building for the 2018 start date though Liberal and Green MEPs are still pushing for 2017.
Compromise amendments represent an attempt to aggregate changes proposed to a bill by individual MEPs and political groups. They will be voted on before all other amendments.
If the compromise amendments draw wide support among the environment committee MEPs this increases the likelihood that Ivo Belet, the MEP steering the bill through parliament, will request permission from the committee to immediately start negotiations with national governments on the bill, speeding its progress into law rather than first waiting for a vote among the full parliament.
To become law, the MSR must be agreed by both the Parliament and national governments in the Council of Member States.
Environmental campaigners Change Partnership have uploaded a copy of the full compromise amendments here.
By Ben Garside – email@example.com