{"id":3500996,"date":"2022-09-29T08:04:35","date_gmt":"2022-09-29T07:04:35","guid":{"rendered":"https:\/\/www.globalfactor.com\/?p=3500996"},"modified":"2022-09-29T08:10:23","modified_gmt":"2022-09-29T07:10:23","slug":"lawmakers-close-in-on-eu-carbon-market-frontloading-to-lower-energy-prices","status":"publish","type":"post","link":"https:\/\/www.globalfactor.com\/en\/lawmakers-close-in-on-eu-carbon-market-frontloading-to-lower-energy-prices\/","title":{"rendered":"Lawmakers close in on EU carbon market \u2018frontloading\u2019 to lower energy prices"},"content":{"rendered":"

The EU carbon market is responsible for 10% of the rise in electricity prices, according to Peter Liese, a German MEP who is steering the revision of the EU\u2019s Emissions Trading Scheme (ETS) in the European Parliament.<\/p>\n

The short-term fix will see a \u201cfrontloading\u201d of CO2 emission allowances in order to flood the EU carbon market with liquidity, send the price of carbon down, and ease pressure on electricity prices, he explained.<\/p>\n

And even though he sees renewables and energy efficiency as the long-term answer to the crisis, new clean energy projects will take time to build and deliver results.<\/p>\n

\u201cThat\u2019s why we need a short-term solution,\u201d he said.<\/p>\n

The ETS currently puts a price on the CO2 emissions of around 10,000 industrial facilities as a way of incentivising clean technology. It is currently being revised to align with the EU\u2019s objective of reducing emissions by 55% before 2030.<\/p>\n

In May, the European Commission proposed drawing \u20ac20 billion from the EU carbon market\u2019s stability reserve (MSR) in order to finance a \u20ac300 billion emergency plan to move away from Russian fossil fuels.<\/p>\n

The plan, called REPowerEU, doubled down on renewable energy investments, efficiency measures, and hydrogen deployment in order to get Europe out of Russian fossil fuels \u201cwell before 2030\u201d.<\/p>\n

But Liese said the proposal was too controversial with centre-left political groups in Parliament, which rejected it.<\/p>\n

Rather than drawing allowances from the MSR, lawmakers agreed instead to \u201cfrontload\u201d CO2 permits from the pool of allowances that EU countries can draw from in the period running until 2030.<\/p>\n

The allowances would be auctioned from May next year until the end of 2025. Once \u20ac20 billion are raised from the auction, the mechanism would stop, Liese explained.<\/p>\n

\u201cIt will be taken from the member state\u2019s auctioning share,\u201d which means EU countries will have less money from the ETS after 2026, the German MEP said. And after that, there will be less allowances left in the pool until 2030, which means pressure to decarbonise \u201cwill be even higher,\u201d Liese said.<\/p>\n

\u201cThat\u2019s why member states are not so happy,\u201d he admitted.<\/p>\n

In addition, MEPs strengthened spending rules by inserting new criteria in the draft legislation to ensure EU member states use the money only for the green transition, in line with the EU\u2019s green finance taxonomy.<\/p>\n

\u201cFinancing RePowerEU should not lead to more emissions. By frontloading allowances that would otherwise be auctioned by the member states we are maintaining the climate integrity of EU ETS,\u201d Chahim said.<\/p>\n

The compromise deal will now be submitted to the Parliament\u2019s environment committee on Monday before it is taken to plenary. EU member states have yet to take a formal position on the Commission\u2019s REPowerEU proposal.<\/p>\n

Source: Euractiv<\/p>\n<\/div><\/div><\/div><\/div><\/div>\n","protected":false},"excerpt":{"rendered":"

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