BREAKING: ETS market hike on the cards as parliament votes for backloading
The European Parliament has voted to support a measure to temporarily freeze 900 million allowances from the EU Emissions Trading Scheme (ETS) scheme over the next two years.
Known as 'backloading', the measure was approved in a plenary vote by 344 to 311, a reversal of April's vote, which saw the proposal narrowly defeated by 29 votes.
The backloading proposal, which has been supported by Environment Secretary Ed Davey, as well as a number of NGOs, is aimed at pushing up the price of carbon and making low carbon investments more attractive.
European Wind Energy Association's (EWEA) senior regulatory affairs advisor Rémi Gruet said: "Today's vote will give a small boost to the carbon price but most importantly it will build confidence in the ETS.
"It is crucial that the EU Member States now agree backloading as soon as possible. Then the European Commission should propose a 2030 Climate and Energy Package, with headline renewable and GHG reduction targets, without delay."
Many experts feel that while the backloading vote will bring a temporary reprieve to the struggling scheme, long-term structural reform is crucial in saving the ETS.
WWF European Policy Office Sam Van den plas said: "The European Parliament has done the minimum to rescue the ETS from redundancy.
"Member states should back further measures to eliminate these toxic tonnes permanently from the EU's carbon market."
Climate Action Network Europe's Julia Michalak added: "By approving back-loading and rejecting several dangerous loopholes that had been proposed as part of a compromise, they've paved the way for the necessary deep reform of the EU ETS.
"Member States must start to negotiate the final outcome as soon as possible - we have lost enough time already."