On 15 December, the European Parliament’s Environment Committee passed a series of changes to the Emissions Trading System, a majority of which would come into effect after 2020.
These include:
Measures to speed up the removal of pollution permits from the market. The committee agreed to increase the annual linear reduction factor from 2.2% to 2.4% in an effort to better address the EU’s long term decarbonisation objectives.
Doubling the take-out rate of the Market Stability Reserve (MSR) from 12% to 24% for the period 2019-2022 to reduce the EU ETS surplus.
Cancelling 800 million allowances from the MSR in January 2021.
Cancelling up to 200 million allowances.
Transferring auction allowances to the innovation fund.
