The ETS2 delay will become law. A breakthrough in Brussels, the Ministry of Climate confirms the date

ETS2 delay will soon become law; Talks between member states and the European Parliament on this matter may end as early as December – Deputy Minister of Climate and Environment Krzysztof Bolesta told PAP Business. He added that the permit price control mechanism proposed by the European Commission on Thursday will only become operational when the delayed ETS2 launches.

The European Commission on Thursday proposed changes to the reserve in the carbon market (MSR) to ensure a smoother start of operation of the new system for emissions in road transport and buildings ETS2. These changes include: increase the possibilities of stabilizing permit prices on this market when they exceed EUR 45 per tonne of CO2.

When asked by PAP Biznes whether Thursday's EC proposal corresponds to the decisions of the November EU Environment Council regarding the delay of ETS2 and additional safeguards against increases in permit prices on the ETS2 market, Bolesta replied that it absolutely was.

“The ETS2 delay will soon become law. We are at the stage of finalizing talks between countries and the European Parliament. I think that these talks will end in December. What the Commission has now put on the table is a price control mechanism that will start operating in relation to the delayed ETS2,” said the Deputy Minister of Climate and Environment.

“This package of solutions that the Commission has proposed today aims to keep the costs of ETS2 in check. But as I said, it will only work once the system is operational,” he added.

In Thursday's package of changes to the MSR reserve, the Commission also proposed the possibility for member countries to start the ETS2 auctions earlier, which will allow them to generate an early price signal and obtain revenues for early investments already in 2027.

“In this context, earlier auctions are also postponed by a year,” Bolesta explained.

“I don't know whether and in what form we will agree on this new Commission proposal, but early auctions are intended to check how the market values ​​emission permits before the settlement obligation comes into force. To put it simply, it is a market study,” he added.

He confirmed that only willing EU countries will join the early ETS2 auctions.

“If someone wants to check where the market is, they will organize it themselves. This is an element of this package at the request of Belgium,” he added.

The Market Stability Reserve (MSR) is one of the most important tools regulating the supply of allowances on the CO2 emission allowances market (EU ETS). It aims to restore the balance between supply and demand, as well as to increase the resistance of this market to price shocks by adjusting the number of allowances that are auctioned.

At the beginning of November, the Ministry of Environmental Protection announced that at the EU Environment Council, Poland and other opponents of the ETS2 system managed to agree on delaying its entry into force by one year. At the same time, the environment ministers of the EU countries agreed to set a climate target for 2040.

ETS2 was to cover in 2027 emissions from fossil fuels used in road transport and for heating buildings.

After the meeting, the head of the Ministry of Environment and Environment, Paulina Hennig-Kloska, informed that the European Commission is to present a revision of the ETS2 directive by the end of the year with proposals for profound changes, which will later be negotiated with the participation of EU countries and the European Parliament. She indicated that the main goal of negotiating the ETS2 revision for Poland is to minimize the impact of this directive on the costs of living of households. Among these goals, she also mentioned a delay of ETS2 longer than one year as a result of further negotiations in the EU. (PAP Business)

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