German environment minister Barbara Hendricks said on Thursday that her country would continue to push for an earlier MSR start than the 2021 date that member states have agreed a common line on.

Germany has led efforts to introduce the EU ETS reform as early as 2017 but a blocking minority of nations led by Poland refused to budge during negotiations to forge a Council position on Wednesday.

In a statement, Hendricks welcomed the part of that deal to put the 900 million backloaded permits directly into the MSR but said Germany “was still not satisfied with the result” and hoped to see “improvements” to the text in upcoming negotiations with the European Parliament and Commision.

“We continue to work hard to ensure that the reform engages as soon as possible,” she said.

Poland’s senior climate official Marcin Korolec said on Twitter the Council deal was a “good result for us. Managed to lock the start date for MSR for 2021.”

The first trilogue negotiation between the three EU institutions is scheduled to begin on Mar. 30, with Belgian MEP Ivo Belet leading the Parliament’s delegation.

INCENTIVES NEEDED

Despite a strong mandate from all the major political groupings for the MSR to start by 2019, Belet is unlikely to be able bring the date forward without fresh incentives for the blocking minority nations, according to Stig Schjolset, an analyst at Thomson Reuters Point Carbon.

He said Poland and its allies don’t really have to compromise because they wouldn’t mind if the talks collapsed, resulting in no MSR at all.

“Those who want an early start will thus need to offer more to get a deal. It will have to be a carrot rather than a stick, as I don’t think Belet will be able to twist Poland’s arm on this,” he said.

He said one sweetener would be to earmark the proceeds from selling a portion of unallocated EUAs for use in those countries or a guarantee that their free EUA allocation for power generators would be untouched by the MSR.

By Ben Garside – ben@carbon-pulse.com