MSR deal awaits sign-off as Polish utilities call for further work

Published 17:47 on May 11, 2015  /  Last updated at 09:27 on May 12, 2015  /  EMEA, EU ETS  /  No Comments

The MSR deal is scheduled to be ruled on by EU member state officials at a meeting on Wednesday as part of a lengthy lawmaking process, with chances of the bill being derailed viewed as remote.

The MSR deal is scheduled to be ruled on by EU member state officials at a meeting on Wednesday as part of a lengthy lawmaking process, with chances of the bill being derailed viewed as remote.

Last week, envoys from the three EU institutions clinched a deal on the MSR text but the informal negotiations still require formal endorsement from the Council of member states and Parliament.

Lawmakers and some industry groups have raised the prospect that the measure could face delays if Poland manages to regain enough support to form a blocking minority.

Observers think this is highly unlikely.

“It’s theoretically possible that the MSR would not go through, but we view that as unlikely and we expect a smooth process. They have overcome the main hurdle, now it’s a rather more straightforward procedure,” said Yann Andreassen, an analyst at ICIS-Tschach.

INDUSTRY DIVIDE

In a letter to the European Commission dated May 8, the Polish Electricity Association called for an “in-depth impact assessment” to properly assess its impact on electricity prices and the competitiveness of European industry, Reuters reported on Monday.

The Association’s membership includes big state-owned, coal-burning Polish generators PGE, Energa and Enea.

The move saw the group break ranks with Eurelectric, a much bigger group of utilities across Europe, which strongly welcomed the MSR deal last week.

The issue has been put on the agenda for approval at Wednesday’s Coreper meeting of member state ambassadors, a spokesman for Latvia confirmed on Monday.

Steel association Eurofer, however, raised serious concerns about the MSR’s early introduction under the deal and called on lawmakers to adopt “clear and long-term carbon leakage measures as soon as possible” to mitigate the impact of higher carbon prices not faced by their international competitors.

PATH TO LAW

The MSR  bill is on the agenda for potential approval on Wednesday, a spokesman for Latvia, chairing the talks, confirmed to Carbon Pulse on Monday.

If officials from a qualified majority of states give their approval on Wednesday, the bill passes to the EU Parliament and requires a simple majority in a vote of its environment committee due May 26 and the whole assembly scheduled for July 6.

The bill then goes for final approval at any formal Council meeting of national ministers, before being made law by appearing in the Official Journal of the EU, possibly by mid-July.

By Ben Garside – ben@carbon-pulse.com