Share this page: 

A freeze in the auction of some pollution allowances should be allowed to help boost green investments, according to environment committee MEPs voting on draft legislation on Tuesday.

The growing surplus of pollution allowances – due to initial oversupply and the economic slowdown – has seen the carbon price fall well below levels estimated when the EU emissions trading system (ETS) was created.

“The environment committee has sent a clear signal in favour of a strong and healthy emissions trading system. A stronger carbon price will help catalyse Europe’s transition towards a low-carbon economy”, said Environment Committee chairman Matthias Groote (S&D, DE), who is steering the legislation through Parliament.

“Creating the EU ETS was a landmark achievement but there is also a learning process. Delaying auctions is only a temporary fix, but it is a positive step”, he added.

“Exceptional circumstances”

In an approved amendment tabled by the S&D, ALDE, Greens/EFA and GUE/NGL groups, MEPs say the Commission "may, in exceptional circumstances" adapt the timing of auctions, provided an impact assessment shows the sectors concerned will not face "significant risk" of companies relocating outside the EU. "The Commission shall make no more than one such adaptation", the text adds.

Moreover, the measure “should be considered a short-term action, rather than a structural measure intended to address market imbalances of the EU ETS, and should not undermine the stability and predictability” of the system, MEPs add.

Vote and next steps

MEPs in the lead Environment Committee supported the measure to allow the Commission to “backload” – or delay - the timing of auctions with 38 votes in favour, 25 against and 2 abstentions. A non-binding industry committee vote on 24 January had advised against allowing this market intervention.

The committee will vote next week on whether to negotiate an agreement with member states before going to a vote in plenary.

In the Chair: Matthias Groote (S&D, DE)