Carbon Market Fix one Step Closer after Key Vote
Today the European Union's Environment Committee voted in favour of a Market Stability Reserve (MSR) with a start date of 2018, and strong carbon leakage provisions at the heart of the proposal. Since the financial crash of 2008 industry demand for licences to emit carbon has declined sharply, leading to a glut of over two billion licences on the market which has in turn left the price of carbon low. A low carbon price has stifled investment in vital technology such as Carbon Capture and Storage (CCS), with the CCS facility in Peterhead being a notable example. I am the ECR MEP responsible for the file, and today I voted in favour of the MSR and fixing Europe's carbon market as quickly as possible.
The ECR has three priorities for the MSR: firstly, we want to ensure that those industries at risk of carbon leakage (where companies relocate to countries with less strict regulations) are protected from it; secondly we want to see the EU Emission Trading System (ETS) better reflect the value of the carbon market by transferring allowances directly into the reserve; and thirdly we want to incentivise next generation technology, by establishing an innovation fund that will support investment in new and emerging technologies and practices.
I am pleased that today’s vote in the Environment committee saw Parliament take action on each of these areas. Although I would have preferred the MSR to begin in 2017, I accept that the majority of the Committee did not agree.
Throughout the Committee scrutiny process we have sought to work constructively with political groups, industry and NGOs to secure a coherent parliament position that both recognises the need for a fully functioning EU ETS and the need to protect industries at risk of carbon leakage from global competition.
Parliament can now move forward with an ambitious set of proposals and I look forward to working with colleagues towards a fully functioning European carbon market that will be good for industry and good for the environment.