A group of 14 of Europe’ leading utilities is calling for a stronger Emissions Trading System ahead of a vote in the bloc’s parliament on Tuesday.

In July 2015, the European Commission presented a legislative proposal to revise the EU ETS for the period after 2020.

As part of a coalition Statkraft with industry partners including Centrica, CEZ Group, Dong Energy, EDF, EDP, Enel, Engie, E.ON, Fortum, Iberdrola, SSE, Uniper, Vattenfall and Verbund have sent an ‘electricty sector wakeup call’ with proposals.
European Parliament
The group says the proposed revision is not sufficient to strengthen the ETS as EU’s core instrument for emissions reductions.

According to the group, the ETS is failing to offer a robust carbon price signal to drive investments needed for low carbon electricity system and without further strengthening, the ETS can continue to fail at least in the next decade.

Statkraft claims that it has actively contributed in providing specific text in 2016 to EU Commission’s proposal on the ETS. It says that it has supported and suggested several important amendments for strengthening the ETS.

Energy Business Review reports that these proposals include doubling the outtake rate of market stability reserve (MSR) to 24 per cent from 2019 to address near term supply problem.

Also included in the proposals are increasing the linear reduction factor (LRF) to at least 2.4 per cent for aligning with the EU’s long term objective for 2050 and take into account interaction of the EU ETS with other Union and national climate and energy policies that impact the ETS balance.

It also proposes to allow for voluntary cancellation of allowances by Member States and cancel 800 million allowances placed in the MSR in 2021 and unallocated allowances in the future.

Revision of the ETS is expected to take place at the end of February, before being prepared for vetting by the various EU institutions.