Ed Davey Calls for Urgent Structural Reform from EU
By Anne Lewis-Schneider
UK Energy Secretary Ed Davey has called for urgent structural reform of the Emissions Trading System as it has been vetoed that the auction of excess allowances from 2014 be put off. The temporary measure has been approved because of the downward decline of activity in the industrial sector. He went on to say that greater action is needed to reduce the carbon price in a bid to increase investments in low carbon energy generation.
The European Parliament has agreed to the amendments, which means that the door is now open for the approval of the member states. The “back loading” can only be performed by the EC as a once off occurrence and they will present a proposal to members in January 2014. This is limited to an amount of 900 million allowances. The EU Emissions Trading System was brought into being in 2005 and is currently into the third phase which will end in 2020. Debate on structural changes to the ETS is on-going and no resolution has been reached as yet, with currently a total of six options on the table for consideration. A decision on the auction of the allowances is expected shortly and will ensure that the carbon price stays at an appealing level that will encourage the member states to reduce their emissions and also to encourage investment in new and on-going projects that will come at the end of this third phase in 2020. UK along with other member states are in support of a general 40% reduction by 2030 of all carbon emissions.
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