The EU needs to improve its Emissions Trading System (ETS) and other policies to help its transition towards an economy less dependent on carbon, says a non-legislative report adopted by the Environment Committee on Tuesday.
The committee broadly supports the European Commission's Roadmap, which sets "milestones" including CO2 reduction targets of at least 40% by 2030 and at least 80% by 2050.
"Europe needs a huge increase in investment to boost the economy and create jobs, but investors must have long term policy direction to shape their decisions", said Chris Davies (ALDE, UK), after his report was adopted with 32 votes in favour, 24 against and 5 abstentions. Parliament's plenary vote is planned for the 12-15 March session.
Concerned about the low carbon price and the need to secure investment in green technologies, MEPs call for a "significant" number of ETS allowances to be set aside and changes to be made to the annual rate at which they are taken out of trading.
"The Commission knows that the Emissions Trading System is failing to provide a sufficient price mechanism to guide investment decisions. It must stop delaying and bring forward proposals to address the problems", said Mr Davies.
Biofuels, transport and agriculture
The committee calls on the Commission to develop sustainability criteria for biomass. MEPs also want the Commission to introduce indirect land use change (ILUC) factors in order to take account of the greenhouse gas emissions caused by biofuels production.
On transport, MEPs say the Commission must press ahead with proposing legislation to curb shipping emissions, in the absence of an international agreement to do so. MEPs also recommend setting common agricultural policy (CAP) targets for sustainable use of energy in the agricultural sector.