MEPs voted on Tuesday to start implementing reforms to the EU’s Emissions Trading System by the end of 2018, three years earlier than the Commission’s proposal.
The reform will see millions of surplus carbon allowances withdrawn from the market and placed into a so called market stability reserve.
The measure aims to boost carbon prices on the EU’s carbon market, the biggest in the world, and stimulate low-carbon investments.
But the Parliament’s vote disregarded calls by green NGO’s and member states such as Germany and the UK, who pushed for an earlier start date.
“Every year that they will postpone starting the new reserve, the surplus will grow even bigger. The surplus that it’s suffocating at the moment the EU carbon market will become at some point unbearably high, so high that it might bring the EU carbon market to the brink of collapse. It will be up to them to make sure that it will start by 2017 but also to make sure that it’s a permanent solution to these toxic tonnes,” said Carbon Market Watch Policy Officer Femke de Jong.
MEPs and NGOs gathered outside the Parliament on Monday ahead of the vote to demand an early start of the policy.
Campaigners also say that these “toxic tonnes” endanger the functioning of the EU’s ETS altogether. If Europe does not act, they say, countries will take matters into their own hands.
“The ETS now has accumulated a massive oversupply of emission allowances and it’s not delivering the carbon price signal that we need. If this is not dealt in Brussels, then member states will take the matter in their own hands and we will look at carbon taxation policies, standards for the power sector. So it needs to be dealt with urgently,” said WWF Climate and Energy Policy Officer Sam Van des plas.
The ETS is Europe’s attempt to cut greenhouse gas emissions by charging for the right to emit carbon dioxide. But weak economic growth has cut industrial production and energy demand, creating an excess of more than 2 billion permits.