Lawmakers give positive first reaction to EUA set-aside
EU environment and energy ministers gave a positive first reaction to the Commission's proposal to set aside allowances from the Phase III cap.
The ministers met informally in Hungary last week to discuss EU climate policy, including a European Commission white paper on reducing 2013-2020 EU allowance (EUA) supply to offset lower demand for these credits in the wake of new energy efficiency targets.
There was no outright endorsement of the so-called 'EUA set-aside' at the meeting − but ministers supported the principle of reaching low carbon investment through the carbon price.
They also recognised that parallel low carbon targets, such as phasing out fossil fuels subsidies or mandating energy efficiency, could drive down emissions beyond what was expected when the EU agreed the Phase III cap for the emissions trading system (ETS).
"It is clear that in funding decarbonisation, priority should be given to innovative solutions that leverage private funds.... [this includes] the effective incentive power of the EU ETS," the Hungarian presidency said in official conclusions.
The ministers now want the Commission to explore further how EUAs could be set aside. The aim is to reach a first agreement at the environment council in June.
Any change to the EU Phase III cap would need approval by both the Council of the European Union − made up of national governments − and the European Parliament. IS
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