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EU council, parliament braced for tough ETS talks

8 Nov 2017, 1.02 pm GMT

EU council, parliament braced for tough ETS talks

London, 7 November (Argus) — EU lawmakers are preparing for challenging negotiations tomorrow over a revision of the EU emissions trading scheme (ETS) that will govern phase 4 (2021-30), as deep divisions suggest a final agreement could prove elusive.

The EU Council, the European Parliament and the European Commission will meet for a sixth trilogue session in the hope of reaching a consensus on the post-2020 EU ETS legislative framework.

The main sticking point in negotiations remains whether finance from the EU ETS modernisation fund should be used to fund coal-fired plants in eastern Europe. Parliament has proposed that power plant projects should be subject to an emission performance standard, to ensure strict requirements regarding eligibility for finance.

But such an eligibility requirement does not form part of the negotiating mandate agreed by the council, partly because this measure is heavily opposed by coal-reliant EU member states such as Poland. And the council has not revised this mandate since the last trilogue talks on 13 October failed to deliver a deal.

The parliament has similarly not changed its position, but its environment committee spokesman is optimistic that a deal can be reached, given that only one major issue is still outstanding. And some political parties have indicated a greater willingness to compromise than others.

Swedish social democrat member of parliament Jytte Guteland said parliament has already compromised considerably and it is the council's turn to do the same. She cited parliament agreeing to extending a derogation for poorer, mainly eastern European member states, whereby they can continue to allocate free EU ETS allowances to their power sectors until 2030.

But the office of European People's Party (EPP) spokesperson Peter Liese said the party is willing to compromise on the emissions performance standard for power plants, although the wider parliament has so far proved unwilling to shift on the issue. The power plant emission performance standard could be lowered or different wording could be adopted in the legislative text that prohibits funding for new coal-fired plants, it suggested.

The EPP expressed optimism that an agreement will be reached, given the political pressure for a deal. EU stakeholders share a strong desire to send a positive signal to the UN climate talks taking place in Bonn, Germany. This could prove decisive and ultimately push the negotiating parties into reaching a compromise tomorrow.

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