A coalition of 31 non-governmental organizations (NGOs) has penned an open letter urging Members of the European Parliament (MEPs) to vote in favour of a revision to the EU emissions trading scheme (ETS) directive that would establish a carbon price sufficient to phase out coal generation after 2021. The letter emphasizes the crucial role of MEPs in shaping the operations of the EU ETS for the period between 2021 and 2030, with key amendments under consideration that could impact the cap level, allocation of free allowances, and distribution of innovation funding.
Key Recommendations:
Tightening the Cap: The letter highlights the need for MEPs to ensure that the cap on emissions is stringent enough to facilitate the phase-out of coal-fired generation.
Cancellation of Article 10c Derogation: The NGOs urge the cancellation of the Article 10c derogation, which currently allows certain lower-income member states to provide free allowances to power generators, with the requirement that the funds be invested in modernizing their electricity systems.
Elimination of Fossil Fuel Funding: The letter calls for amendments to exclude new or existing coal-fired generation from receiving funding through the modernization fund established in phase four. The fund, which will be populated with 2% of the total EU ETS allowances during the phase, aims to support energy infrastructure upgrades in 10 lower-income member states.
Robust Governance of the Modernization Fund: The NGOs emphasize the importance of strong governance for the modernization fund, including the participation of both beneficiary and non-beneficiary member states. Such governance would enhance the credibility of investments supported by the fund.
Conclusion:
MEPs in the Environment Committee play a vital role in shaping the future of the EU ETS through their upcoming vote on the directive. The NGOs stress the urgency of delivering a strong carbon price that would effectively phase out coal generation. By cancelling the derogation and excluding fossil fuel funding from the modernization fund, MEPs can drive the transition to a cleaner and more sustainable energy system. Robust governance of the fund will ensure transparency and credibility in supporting energy infrastructure upgrades across lower-income member states.
