Overcoming right-wing opposition to capping greenhouse gas emissions – working together for a better future

In September I was appointed the S&D Shadow Rapporteur for an opinion by the Industry, Research and Energy Committee (ITRE) of the European Parliament on the establishment of a Market Stability Reserve for an EU Emissions Trading Scheme (ETS). The Environment and Public Health Committee (ENVI) was producing a report on this and, given the importance of this issue to industries right across Europe, ITRE was asked to give its opinion.

My job was to shadow and amend what was being done by fellow MEP Antonio Tajani (EPP), a former Commissioner, as he was tasked with delivering the ITRE opinion.

Today we voted to reject this opinion. I would like to explain why.

The EU ETS is the cornerstone of the European Union’s effort to reduce its emissions of greenhouse gases. By capping overall greenhouse gas emissions from majors sectors of the economy, the EU ETS creates an incentive for companies in Europe to invest in technologies that cut emissions and promote low carbon investment.

Revenues from the sale of allowances are being used, through the NER300 programme, to co-finance the construction and operation of large scale demonstration projects in low-carbon technologies: carbon capture and storage (CCS), and innovative renewable energy technologies.

The White Rose CCS project in the North East region of the UK has been funded through this programme and awarded €300,000,000. I hosted an event in the European Parliament in November on the importance of CCS as part of a suite of solutions to help industry decarbonise and work to combat climate change.

The EU ETS is also an important building block for developing an international network of emission trading systems. Linking the EU ETS with other robust emissions trading systems provides several potential benefits which include reducing the cost of cutting emissions, levelling the international playing field, making sure that we are not undermining our industries and supporting global cooperation on climate change.

The EU ETS is already in existence but it is currently failing as there is a massive surplus of allowances on the market, which means that the price on emissions is below the level needed to stimulate investment in low-carbon technology. By introducing an MSR we hoped to fix the ETS and address the issue of surpluses.

As Shadow Rapporteur I worked hard with fellow MEPs in both the S&D group and across the political divide, as well as with representatives of industry and social partners to deliver a reform of the EU ETS that would revitalise the scheme and would promote a sustainable economy for years to come.

My proposals for reform centred on two clear objectives: an early start date for the MSR of 2017. The ETS is not working at the moment, why delay in fixing this? The sooner we start the sooner we can have a real impact. The second objective was on the issue of the back-loaded allowances. I along with my S&D colleagues wanted to see the back-loaded allowances brought back into the reserve and that 300 million of the unallocated allowances would be used for an innovation fund.
Unfortunately, we faced massive right-wing opposition which proved insurmountable in the end. I could not get the outcomes we wanted on an early start date for the MSR or in relation to the back-loaded allowances.

The position adopted by opposition groups was highly regressive and would have had an extremely negative impact on the EU ETS without benefiting industry in the long run. Thankfully, when it came to the final vote on the opinion I managed to secure its rejection. We did this in order to send a strong message on sustainability and jobs.

If the opinion had been adopted it would have meant the ITRE position would be that MSR should not start until 2021. This would have sent a very negative message to the Parliament’s Environment (ENVI) committee. In view of this I did not feel that either I or my political group could support the opinion as a whole and therefore we voted against the proposal.

I worked with other sympathetic political groups on the floor of the committee chamber to snatch victory from the jaws of defeat by securing the rejection of the opinion.

As a result of this, Mr Tajani has not been given a mandate by the ITRE committee and the opinion will not be sent to the ENVI committee and member states for consideration.

It is not an ideal outcome – I would have preferred if our amendments for an early start date and to bring the back-loaded allowances into the reserve had been supported. Today’s vote clearly shows that we need a more ambitious and progressive approach – both for industry and the environment. In order to have a working EU ETS, one that is stable and predictable, we need a fully functioning MSR as quickly as possible.