[Arragonis]

Policy in action (or inaction). EU ETS looks doomed.

EU climate policy in crisis after ETS rejection | European Voice

MEPs voted in Strasbourg today (16 April) to reject a proposal from the European Commission to delay auctioning of carbon allowances in the European Union's emissions trading scheme (ETS).

The carbon market fell by the highest rate ever following the vote, with the price of carbon plummeting by as much as 45% to a record low of €2.63. The proposal would have delayed the auctioning of some allowances in order to increase the deflated price of carbon, which was meant to be around €30 at this point. But heavy industry warned that this type of intervention in a market mechanism would erode confidence in the system.

The vote, with 334 MEPs against the proposal and 315 for it, is itself being seen as a crisis of confidence in the system. Stig Schjølset, head of EU carbon analysis for PointCarbon, said the proposal is now “effectively dead”.

“This means there will be no changes to the current system until 2020,” he said. “Prices will stay really low up to then. The EU ETS will not bring about any additional greenhouse gas reductions, so it will be irrelevant in terms of reducing total emissions in Europe.”

"The EU's carbon market is at crisis point,” said Green MEP Bas Eickhout after the vote. He called the combination of centre-right MEPs, German Liberals and some hard left MEPs from the GUE group who voted to reject the proposal an “irresponsible and unholy alliance of MEPs.”