EU parliament’s ETS reform met with praise and chagrin in Germany

The German Renewable Energy Federation (BEE) has criticised the European Parliament’s propositions for a reform of the EU’s Emissions Trading System (ETS) for being “an empty shell” that cements the system’s status as “an ineffective instrument for climate protection”. The ETS was “not going to achieve the CO₂-reductions provided by Paris”, the BEE said in a press release. The federation said the number of issued certificates had to be reduced by 4.7 percent per year to limit global warming as intended, while the 2.2 percent the parliament now agreed on were failing to achieve this goal. Since the ETS turned out to be an ineffective instrument on the European level, the BEE called for a national approach in which CO₂-emissions in the power and heating sector receive a price tag.
By contrast, the liberal Cologne Institute for Economic Research (IW Köln) said the ETS was “functioning well”. In a press release, the institute rejected criticism that the current price of five euros per tonne CO₂ was too low. It defended the parliament’s decision to issue more certificates free of charge as this ensured the energy intensive industries’ competitiveness.

Find the BEE’s press release in German here and the IW Köln’s press release in German here.

Find a Reuter’s article on the ETS reform in English here.

For background read the CLEW factsheet Understanding the European Union’s Emissions Trading System.