The European Parliament gave final approval to backloading plans on Tuesday, in a bid to stabilise the EU Emissions Trading System.
MEPs voted 385 to 284 for the proposal to delay the auction of 900 million emissions allowances. The move is intended to strengthen the carbon price in the short term, while longer term measures are worked out.
Matthias Groote, the German MEP steering the legislation through the Parliament, said the move would help restore the incentive to invest in low carbon innovation after a glut of permits depressed the price. He said: “I am pleased that we managed to convince our colleagues that backloading is absolutely necessary for our emissions trading scheme to meet its objectives.”
The proposal has had a rocky passage through the Parliament. MEPs rejected it in April before accepting it, with some compromises, in July.
Connie Hedegaard, EU Commissioner for Climate Action, tweeted: “Finally! Sometimes it takes time to get things moving in politics – but we got it. #Backloading is now a reality. With a solid majority!”
The plan still has to be approved by the Council of Ministers, which meets on 16 and 17 December, before the Commission can implement it. This is expected to be a formality. The European Commission is preparing to publish proposals for deeper structural reforms to the EU ETS in January, alongside a climate change framework for 2030. These reforms could include retiring allowances early, introducing supply-side flexibility or increasing the “linear reduction factor” by which the cap on emissions changes year on year.
See also DBDH’s press release earlier this year: