The industry committee of the European Parliament has backed a Commission proposal for removing permits from the EU's Emissions Trading System (ETS), approving a yearly rate of 2.2% for removing carbon permits from the market between 2020 and 2030. It has also approved an alternative way to allocate free permits to industry and a higher thresholds for small companies covered by the scheme to opt out of the system.
In the last few years, economic slowdown limited demand for carbon allowances that have piled up, leading to an oversupply and to depressed prices.
In July 2015, the European Parliament approved a proposal to start reforming the European Union Emissions Trading System (EU ETS) in 2019, by establishing a Market Stability Reserve (MSR) that would remove some of the surplus of carbon allowances and revive falling emission permit prices. The MSR would also release the pollution permits in the case of higher demand. The MSR was initially expected to start operations in 2021, with coal-reliant Poland opposed to any action before this date, while some other countries pushed to start as early as 2017.
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