Following the recent announcement both of the proposed delay of introduction of ETS2 and also the proposed reforms to the Market Stability Reserve of the ETS2 concerns are raised by the European Environmental Bureau, Climate Action Network Europe, The Green Tank, Citizens Climate Europe, Ecodes, Fundación Renovelables, Rescoop, Leveo Munkacsoport, Electra Energy, Energiaklub, CDE.
In response to pressure from national governments, the European Commission has proposed changes to the Market Stability Reserve that will regulate the supply of pollution allowances for the new Emissions Trading System for road transport and buildings (ETS2). While a couple of changes are welcome, others risk stifling the system’s climate effectiveness. In recent months …
A letter addressed to Commissioner Hoekstra and Commissioner Jørgensen from the European Environmental Bureau, Climate Action Network Europe and the LIFE Effect consortium – to which Carbon Market Watch is a member – relating to ideas for a reform of the ETS2, in particular the MSR2, as proposed by a recent non-paper signed by 16+ Member States.
This explainer highlights the risks such changes will create in terms of generating higher emissions and the dangers politically of opening up different legislative instruments.
A dangerous approach to addressing high ETS2 prices would be to reform the Market Stability Reserve prematurely – before the real price signal and emission levels in the market become clear and without considering the environmental implications of the additional allowances that would enter the market and risk exceeding the ETS2 emissions cap.
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