BRUSSELS Feb 28 Germany will back a plan to
strengthen carbon prices, a senior official said on Tuesday,
ahead of a meeting of European Union environment ministers on
balancing the needs of industry with cutting emissions in
reforming the carbon market.
EU member states such as Germany, Italy, Austria and Greece
are prioritising measures to ensure that regulation does not
drive big industry abroad, while poorer, coal-reliant nations in
Central and Eastern Europe are keen to get the most generous
provisions possible to help modernise their economies.
Last week the European Parliament adopted a draft reform of
the EU's emissions trading system (ETS) and environment
ministers meeting in Brussels are keen for swift adoption of
what will be its first big piece of climate legislation since
the EU ratified the Paris accord on global warming.
The cap-and-trade permit system is the EU's flagship policy
for meeting its climate goals by regulating emissions at 11,000
industrial and power installations. It has suffered from excess
supply since the financial crisis, which depressed prices.
But EU nations are divided over the level of ambition in
measures to strengthen prices, how much protection industry
needs to remain competitive and how best to manage funds to help
laggards modernise their economies.
Sweden and France are leading a push to shore up carbon
prices by doubling the rate at which the scheme's Market
Stability Reserve soaks up excess allowances and a mechanism for
cancelling surplus permits after five years.
Although ten nations back this plan, EU diplomats had feared
it will not carry enough weight without Germany's backing. A
minimum of 16 member states is required to back the compromise
deal, representing at least 65 percent of the total EU
"The MSR has to be strengthened, we support that," Jochen
Flasbarth German state secretary for the environment told
journalists ahead of Tuesday's meeting. But big differences
remain on other aspects of the reforms: "We have a lot to
discuss ... with a bit of flexibility we can get there."
The ETS is the EU's main tool to achieve its goal of a 43
percent cut in greenhouse gases from industry and power plants
compared with 2005. If ministers fail to find common ground,
they will next take up the issue in June, delaying reforms.
"Europe has to keep its leadership in the climate arena,"
French Environment Minister Segolene Royal told reporters. "We
have to protect our industries but only up until a certain
point, without it leading to a fall in the carbon price."
(Writing by Alissa de Carbonnel; Editing by Alexander Smith)