Parliament will reject 2021 for EU ETS fix - MEPs

OREANDA-NEWS. All of the European Parliament's major parties would vote against a 2021 start for a proposed market stability reserve (MSR) for the EU emissions trading scheme (ETS), should the draft measure return to the plenary in that form.

EU Council representatives are negotiating on the basis of a text that foresees the reserve become operational in 2021 with a full transfer of back-loaded allowances but no transfer of unallocated allowances.

This is in contrast to the approved position of parliament's environment committee, which was for a late-2018 start and a full transfer of back-loaded and unallocated allowances.

After the council reaches a position, the Latvian Presidency will then enter trilogue negotiations on the council's behalf with representatives of the European Commission and the parliament. These trilogue negotations will produce a proposal that will then need final approval from parliament on one side of the process, and the council on the other. The European People's Party (EPP) will not accept anything later than a 2019 start in such a parliamentary plenary vote, EPP group co-ordinator Peter Liese said.

"2021 is not a compromise," Liese said. "This is not acceptable for parliament as a whole."

When asked whether the Alliance of Liberal Democrats in Europe (ALDE) would also vote against a 2021 start, the party's group co-ordinator Gerben-Jan Gerbrandy said: "We will vote in favour of 2018 compromise."

Meanwhile, Greens MEP Bas Eickhout said his party would also vote against a 2021 start, and more widely that parliament could not accept a start date later than the end of 2018 as approved by the environment committee.

Matthias Groote, group co-ordinator for the Socialists and Democrats (S&D) could not be contacted, but another party source said 2021 would definitely be a "red line" — or non-negotiable — for the S&D.

Environment committee rapporteur Ivo Belet was unreachable for comment. But Liese, who works closely with Belet in the EPP and who has previously been rapporteur on the proposal to include aviation in the ETS, said that it was very unlikely that a proposal with a 2021 start date would even get as far as a plenary vote in the parliament.

"Parliament's delegation will not accept anything later than 2020 in the trilogue," he said.

Both the EPP and the S&D said that parliament may be more flexible on the issue of unallocated allowances. "We have to accept there is less support for this," Liese said.

If parliament fails to approve the MSR proposal, and the commission does not withdraw it, the council can then still formally adopt its position, with that position then becoming the basis for negotiations.

The council text is then scrutinised by the environment committee and subsequently passed to the parliament plenary for a second reading vote. In that second reading vote there are three options.

Parliament can reject the proposal with an absolute majority, which would kill the legislation. Parliament can amend the text with an absolute majority, prompting the process of conciliation (similar to trilogue negotations) to begin, eventually resulting in a law. If parliament fails to reach any kind of absolute majority, then the council text is considered adopted.