EU will reach agreement on MSR, says MEP

OREANDA-NEWS. March 23, 2015. Member states in the EU Council and the European Parliament will find a middle ground on the proposed market stability reserve (MSR) for the EU emissions trading scheme (ETS), Green member of the European Parliament (MEP) Bas Eickhout said.

"Everyone knows that Europe will look like a fool at the UN climate summit in Paris, if we are unable to resolve this issue over a technical detail," Eickhout said. He expressed confidence that the EU will reach an agreement before the summer.

Council representatives are negotiating a common position on the proposal before entering talks with parliament that are expected to start at the end of March. The latest draft proposal tabled by the Latvian EU presidency foresees the MSR becoming operational in 2021 with a full transfer of back-loaded allowances, but no transfer of unallocated allowances.

But all of parliament's major parties have said they would vote against a 2021 start should the draft measure return to the plenary in that form. Instead, parliament's environment committee voted for a late 2018 start and a full transfer of back-loaded and unallocated allowances.

Most of the main parties in the environment committee — the Socialists, the Liberals and the Greens — all supported a 2017 start, Eickhout said. They only settled for an end of 2018 start to get the European People's Party (EPP) on board, he said.

But this is the furthest that MEPs in the environment committee are willing to compromise, Eickhout said. Even the EPP's Peter Liese said a 2021 start is not acceptable.

If member states in the council expect to be able to push for a 2021 start, they are misjudging parliament's position, Eickhout said.

Parliament managed to forge a path and the proposal eventually adopted by the environment committee represents a broad, over-arching position, despite wide-ranging positions among the different political parties.

"It would be disgraceful if council failed to also reach a compromise position," he said.

The majority of member states also want an MSR, so they will be responsible enough to find a compromise. Ultimately, the council will not be so intractable that the legislation has to be thrown out, Eickhout said.

Member states who want an early start, such as Germany and the UK, may be relying on the fact that in talks with parliament, the council will be faced with "hardliners" in the environment committee who will force it to soften its position on a 2021 start, Eickhout said.

"But at the moment, the one with the loudest voice is winning," he said, alluding to Poland and other eastern European countries that currently form a blocking minority against an early start.

Everything now hinges on the next meeting of EU ambassadors on 25 March, and on the council reaching a position, Eickhout said.