The European Union's governing bodies have been put under increased pressure to raise the carbon price under the Emissions Trading System (ETS) - the EU's main tool for reducing industrial greenhouse gas emissions.
On 28 February the European Parliament's Industry, Research and Energy Committee voted by a significant majority in favour of withholding carbon allowances in the ETS - a move that would increase the carbon price if it were adopted, by significantly reducing the allowances available for trading. The price of carbon has collapsed in recent years - mainly due to the financial crisis, which reduced industrial production and therefore emissions, flooding the carbon market with surplus emissions allowances. This has seriously impacted the effectiveness of the ETS.
The vote came as part of discussions on the Energy Efficiency Directive. The Parliament's Environment Committee had already voted in favour of the move at the end of January.
"It is good to see two important Parliamentary committees recognise the impact the economic crisis has had on the effectiveness of the ETS, and propose solutions to fix it" commented Rémi Gruet, EWEA's Senior Regulatory Affairs Advisor for Environment and Climate.
"The European Commission and Council must now support and implement measures to withhold carbon allowances so that the ETS can rapidly start reducing Europe's emissions as it was designed to do", he urged.
A recent European Commission paper on the impacts of moving beyond a 20% emissions reduction target indicated that it is possible to withhold emissions allowances without harming the lower-income countries in the EU.
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