Decision (EU) 2015/1814 concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme

What it is

The Committee on the Environment, Public Health and Food Safety adopted the report by IVO BELET (EPP, BE) on the proposal for a decision of the European Parliament and of the Council concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme and amending Directive 2003/87/EC . The proposal aims to establish a market stability reserve for the EU Emissions Trading System (EU ETS), as part of the 2030 framework for climate and energy policies. This market stability reserve will operate as of phase 4 starting in 2021. The committee recommended that the European Parliament’s position adopted at first reading following the ordinary legislative procedure should amend the Commission’s proposal as follows: Market stability reserve : the market stability reserve should also ensure synergy with other climate policies such as those on renewable energy and energy efficiency. It shall be established in 2018 and shall operate by 31 December 2018 (as opposed to 1 January 2018). The European Parliament adopted by 495 votes to 158, with 49 abstentions, a legislative resolution on the proposal for a decision of the European Parliament and of the Council concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme and amending Directive 2003/87/EC. Parliament adopted its position at first reading following the ordinary legislative procedure. The amendments adopted in plenary amend the Commission’s proposal as follows: To recall, Directive 2003/87/EC establishes a system for greenhouse gas emission allowance trading within the Union ('EU ETS') in order to promote reductions of greenhouse gas emissions in a cost-effective and economically efficient manner. Market stability reserve : in order to address that problem and to make the EU ETS more resilient in relation to supply-demand imbalances, so as to enable the EU ETS to function in an orderly market, a market stability reserve should be established in 2018 and it should be operational as of 1 January 2019 . The reserve will also enhance synergy with other climate and energy policies. The quantity of 900 million allowances deducted from auctioning volumes during the period 2014-2016, as determined in Regulation (EU) No 176/2014 pursuant to Article 10(4) of Directive 2003/87/EC, shall not be added to the volumes to be auctioned in 2019 and 2020 but shall instead be placed in the reserve. Allowances not allocated to installations shall be placed in the reserve in 2020. The Commission shall review Directive 2003/87/EC in relation to those unallocated allowances and, if appropriate, submit a proposal to the European Parliament and to the Council. According to the amended text, where the conditions are met, beginning in 2019, an amount of allowances corresponding to 12% of the number of allowances in circulation, as set out in the most recent publication of the total number of allowances in circulation by the Commission, should be deducted each year from the auction volumes and placed in the reserve. In any given year, a corresponding number of allowances should be released from the…

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