Preserve climate targets / emissions trading remains the most important instrument, at the same time it is right that we urgently need reforms 

“The European Commission will propose initial changes to the European emissions trading system on Wednesday and will thus also respond to criticism of the system. At the same time, however, it is clear that abolishing or hollowing out the system would have catastrophic consequences,” pointed out the climate policy spokesperson of the largest group in the European Parliament, Peter Liese (EPP).

“Emissions trading is the most important climate protection instrument of the European Union and also the most important instrument worldwide. I still consider its abolition to be completely unjustified, and I am glad that many supporters of emissions trading have recently spoken out, especially from the business community. Nevertheless, reforms are urgently necessary. I expect that the European Commission will, as a first step, propose a reform of the market stability reserve tomorrow, Wednesday. This market stability reserve was introduced when the ETS price was at rock bottom and there were practically no incentives for investments in climate protection. However, prices have now increased, from around 10 euros in 2018 to almost 70 euros, and at times even reached 100 euros. Right now, we no longer need an instrument to counter low prices. In the future, we will need an instrument to counter high prices,” said Liese.

Liese therefore calls on the European Commission to delete the provision in the market stability reserve which, once a certain number of allowances, 400 million, is exceeded, removes everything above that level.

“This provision must be removed as quickly as possible, and if the Commission proposes this, I will advocate in Parliament for an urgent procedure. This is an important signal to market participants that we will not let prices go through the roof,” Liese emphasized.
In addition, according to Liese’s assessment, the Commission will on Wednesday also make an adjustment to the so-called benchmarks. Benchmarks are the level of the top 10% best-performing installations in a given sector, for example in the production of paper, cement clinker, or glass products.

In an initial draft published a few months ago, in some cases drastic cuts were envisaged.
On this, Liese said: “The Commission must adjust the benchmarks. This is legally required and it is only fair, because technological progress continues. However, the Commission has a margin of discretion, and I have urged it to use this discretion in the interest of industry.”