- The European Commission has warned that frequent intervention in the EU emissions market could undermine investment predictability.
- Brussels also criticized a proposal to expand exemptions from conditions attached to free ETS allowances.
- European lawmakers are preparing amendments ahead of committee and plenary votes on ETS reform.
The European Commission has warned that proposed changes to the European Union’s carbon-market intervention rules could weaken the bloc’s Emissions Trading System (EU ETS), while criticizing plans to broaden exemptions for companies receiving free allowances.
Rosalinde van der Vlies, a senior Commission official, told the European Parliament’s environment committee that changes to the mechanism for addressing excessive carbon-price fluctuations could reduce the effectiveness of the ETS.
“Trying to engineer a carbon price through frequent market intervention will lead to less cost effectiveness and will reduce market and investment predictability,” she was quoted as saying by Argus Media.
Van der Vlies also opposed a proposal to expand exemptions from conditionality requirements for free ETS allocations to installations among the 40% most efficient in their sector.
The remark came in response to a draft report by German center-right EPP lawmaker Peter Liese, presented to the Commission ahead of internal parliamentary negotiations on a pending reform package.
Lawmakers Debate Wider ETS Changes
Van der Vlies broadly welcomed Liese’s initiative, calling it a “very solid report,” and Liese himself said he was open to improvements.
Liese urged lawmakers to move quickly as EU member states seek to establish their position ahead of an upcoming meeting of climate and environment ministers. He also called for more effective use of ETS revenues, saying too much of the money had not been used efficiently.
Relevant: Five CDR Associations Urge For Key EU ETS Changes To Unlock Carbon Removal Scale
On aviation, Liese backed a 5,000-kilometer (3,107-mile) approach to the ETS, saying broader inclusion of flights to the U.S. and Asia could have prompted serious responses from other countries. He also supported the Commission’s approach to maritime transport while calling for measures to protect European ports against evasion.
On waste, Liese said adding waste incineration to the ETS in 2028 would be premature and supported the Commission’s proposed 2034 timetable.
Dutch S&D lawmaker Mohammed Chahim argued that neither proposal would meet existing requirements under the EU Climate Law.
Far-right Patriots lawmaker Mathilde Androuet, meanwhile, called for slower emissions reductions and opposed extending the ETS to waste incineration and international flights.
Lawmakers can submit amendments until October 6. The environment committee is due to vote December 1, with a plenary vote expected later that month.
Read more: Hungary Scraps Controversial CO2 Quota Tax In Bid To Ease EU ETS Burden
