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Business leaders urge EU Parliament for swift carbon market reform

The Latvian EU Presidency proposal for a carbon Market Stability Reserve is discussed by EU climate officials today (Tuesday 13 January 2015).

Meanwhile the Prince of Wales’s Corporate Leaders Group has written to MEPs, calling on them to reform the European Union Emissions Trading Scheme (EU ETS) to include a Market Stability Reserve by 2017 at the latest, to keep the continent on track for developing a low carbon economy and energy system. A Market Stability Reserve would reduce the amount of emissions allowance units that the EU is permitted to auction on the global market, should the upper threshold of allowances already in circulation be exceeded.

The Corporate Leaders Group said that introducing the Market Stability Reserve sooner rather than later ‘will give the necessary signals to investors and industry to effectively transition to a low carbon economy and energy system’ and ‘mitigate any downward pressure on the carbon price from structural economic changes or from other energy policies.’

Full press release

Business leaders call on MEPs for timely EU-ETS reform

The European Union Emissions Trading Scheme (EU-ETS) must be reformed to include a Market

Stability Reserve (MSR) by 2017 at the latest, to keep the continent on track for developing a lowcarbon

economy and energy system, European business leaders argued today (Tuesday 13 January

2015).

A Market Stability Reserve would reduce the amount of emissions allowance units (EUAs) that the

EU is permitted to auction on the global market, should the upper threshold of EUAs already in

circulation be exceeded.

In a letter to Members of the European Parliament The Prince of Wales’s Corporate Leaders Group

(CLG) – which brings together leading European businesses on climate change – said that introducing

the MSR earlier rather than later “will give the necessary signals to investors and industry to

effectively transition to a low carbon economy and energy system” and “mitigate any downward

pressure on the carbon price from structural economic changes or from other energy policies.”

The cross-sector group, which includes names like EDF, Shell, Doosan and Unilever, also said that the

900 million EUAs that policy-makers have agreed to set aside and return to auction in 2019-2020

should be included in the total Reserve from the outset. The CLG argued this would help to

rebalance the emissions market and encourage countries to get on with decarbonising their

economies, knowing there would be no ‘get out jail free’ card a few years down the line should they

move too slowly to clean up their industries.

The business leaders also agree that the urgent introduction of the MSR must go hand in hand with a

commitment to bring forward the Phase IV EU-ETS proposals, including further plans for carbon

leakage protection post-2020 and new funding pathways, as this they believe is sound industrial

policy.

Philippe Joubert, Chair, The Prince of Wales’s Corporate Leaders Group, said:

“The EU-ETS is the cornerstone of EU climate policy, so we have to get it right – it must be reformed

to drive forward green growth sooner rather than later.

“Establishing a Market Stability Reserve by 2017, with the 900 million back-loaded emissions

allowances included in the Reserve from the outset, will help to rebalance the emissions trading

market, enable a more robust carbon price, and stimulate the transition to a low-carbon economy.”

Source

@StollmeyerEU • 13th January 2015


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