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MEPs to vote on key ETS reforms in February – Liese

Power

12 Jan 2023 12:41

Photo: Shutterstock.com

Photo: Shutterstock.com

Oslo

12 Jan 2023 12:41

(Montel) The European Parliament’s environment committee will possibly vote on key reforms of the EU ETS in February, with a parliamentary vote due in March, MEP Pieter Liese said on Thursday.

“If everything goes right, I hope we will see the legal text in 2-3 weeks and then have a vote in the environment committee in February,” Liese, the parliament’s lead negotiator on ETS reforms, told a webinar organised by lobby group Ieta.

Negotiators agreed on key ETS reforms in December in trilogue discussions, though technical details still had to be ironed out before the agreement could go to a vote, said Liese.

“Game-changer”

He hailed the deal reached in the early hours of 18 December as “a real game-changer”, with the main thrust increasing the bloc’s emissions cut target to 62% on 2005 levels by 2030, compared to a previous aim of 45%.

Analysts at Greenfact, speaking the same webinar, said the December agreement was mainly bullish for prices, particularly towards the end of this decade and beyond, with allocation of free permits really starting to dry up in the 2030s.

Under the reforms, the annual reduction in the supply of allowances will increase from 2.2% currently to 4.3% in the 2026-27 and then further to 4.4% from 2028-30 and beyond.

“The post-2030 trajectory looks much more bullish… this could already start to have a bullish impact on prices later this decade,” said Marcus Ferdinand, chief analyst at Greenfact.

“Overall, the accumulated number of allowances would be 71% lower in phase 5 of the system [from 2031-40] than in phase 4 [2021-30].”

A planned front-loading of auction volumes from the second half of this decade to the coming few years was also bullish long-term, by providing a tighter market in the second half of the 2020s, he added.

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