EU environment ministers have been sent three questions on post-2020 ETS reforms by Luxembourg, current holders of the bloc’s presidency, in order to advance discussions on the bill.
Member states will respond in a webstreamed orientation debate at the EU Environment Council on Oct. 26 in Luxembourg to gauge their initial positions on the proposal, according to a draft EU Council agenda.
The UK has already said the proposal risks overcompensating industries deemed to be a carbon leakage risk, and will push for a tiered approach to allocating free allowances.
Luxembourg has set the following questions to ministers:
- Do the proposed reforms in combination with the recently adopted MSR adequately strengthen the EU ETS to serve as the key tool to deliver Europe’s climate objectives in the next decade, including climate finance for vulnerable third countries?
- Do the proposed free allocation rules strike the right balance between addressing the risk of carbon leakage to safeguard the competitiveness of energy-intensive industry, and strengthening the incentive to innovate in the transition to a low-carbon economy?
- Are the proposed low carbon funding mechanisms for industrial innovation and energy sector modernisation a sufficient stimulus for public and private investments needed to achieve the 2030 climate target?
The reform proposals need a majority of member states and the EU Parliament to agree to become law.
Both will debate changes in a process expected to take at least a year.
By Ben Garside – ben@carbon-pulse.com
