The EU’s carbon market is “at best an irritant right now” with its current low prices and therefore must change, wrote Ian Duncan, the UK MEP steering ETS reforms through the bloc’s parliament, in a glossy feature for Parliament Magazine.

He spoke of the “widespread acknowledgement” among EU lawmakers of the need for free allowances to be better targeted at those businesses that needed them most, noting that the debate over the reforms had so far afforded little attention to the proposed Innovation Fund.

“I don’t want to see a new regional development fund, but rather a fund led by excellence,” he wrote, adding that bureaucracy and red tape had hindered the projects under the current NER300 fund from going ahead.

Duncan also suggested that serious consideration be given to an bloc-wide exclusion clause for small emitters that face disproportionately large administration costs.  Currently only a handful of member states offer this exit opportunity.

SMOOTH PASSAGE?

Duncan said he will draft a ‘skeleton’ report of his proposed changes to the EU ETS revision proposal in April, which will set out a series of options for the key issues.

He said shadow rapporteurs from each political group must then help determine the final report to be voted on in the parliament’s environment committee in the autumn.

“Each shadow will have to be able to explain how their environment committee delegation will vote, and ultimately how their political group will vote in plenary.

With this collegiate approach, Duncan is hoping to avoid the political wrangling and confusion that occurred during previous ETS reforms, which included Backloading being initially rejected by the whole parliament.

“The final compromises must necessarily reflect this reality, but I do not doubt that they will be the subject of serious debate,” he added.

The article also has selected views of senior MEPs from across several political groups close to the process.

By Ben Garside – ben@carbon-pulse.com