The latest draft MSR text by EU Presidency Latvia says the mechanism should start “no later than 2021” but offers little more to bridge a west-east split over the issue, leaving countries deadlocked going into Wednesday’s crunch meeting.

The text, dated March 20 and seen by Carbon Pulse, also suggests the fate of unallocated EUAs should be assessed by the European Commission as part of the upcoming ETS Directive review, more specific than a previous call for the EU executive to merely introduce a proposal if appropriate.

Latvia has previously proposed that the 900 million backloaded allowances should not be auctioned in 2019 and 2020, and instead be injected into the reserve in 2018. However, the latest draft does not specify a date for this.

Member state officials will reconvene to discuss this latest draft on Wednesday, with Latvia aiming to get a mandate to launch final trilogue talks with the Parliament and Commission over the bill from Mar. 30.

Poland claims the support of at least seven other member states, enough for a blocking minority, in opposing moves by other member states to start the MSR earlier than 2021.

One source in Brussels close to the talks said the blocking minority remains solid, and that Wednesday’s Coreper meeting is unlikely to yield any progress.

“Coreper will be straight forward, so now we wait and see what happens during the first trilogue from Mar. 30. If neither side budges, this could possibly stretch into the next EU presidency,” he added.

Luxembourg becomes the next EU presidency holder on July 1.

Several MEPs last week said the European Parliament would not accept a deal forged by member states that would mandate a 2021 launch.

By Ben Garside and Mike Szabo – mike@carbon-pulse.com