These are the key takeaways from Latvia’s new MSR proposal, which was circulated to member states on Thursday and seen by Carbon Pulse:
– MSR should be established in 2018 and it should be operational as of 2021.
– 900 million backloaded allowances should not be auctioned in 2019 and 2020, but should instead be placed in the reserve.
– Does not rule out putting any unallocated EUAs into the reserve at the end of phase 3 in 2020, but rather calls for the European Commission to assess what should be done with them and, if appropriate, to submit a proposal to the European Parliament and to the Council on the matter.
– Calls for rejection of carbon leakage provisions in the EU Parliament’s proposal, and suggests this be dealt with under the wider review of the ETS Directive, on which the Commission expects to start work in June.
Member state officials will reconvene to discuss this latest draft proposal at a working group on Mar. 16.