EURELECTRIC Welcomes Yesterday’s Deal on the ETS Market Stability Reserve

EURELECTRIC strongly welcomes theprovisionalagreement reachedyesterday by the EuropeanParliament and the Council on the proposal to establish a Market Stability Reserve (MSR) under the EUEmissions Trading System (ETS). EURELECTRIC has consistently advocated the need for an urgent andthorough reform of the ETS, including a robust MSR which enters into operation early and ensures that the 900 million backloaded allowances as well as the unallocated allowances are transferred to thereserve. The deal reached yesterday will establish an effective reform mechanism inline with all these expectations.

Hans ten Berge, EURELECTRIC Secretary General,said:"The outcome of negotiations on theMarket Stability Reserve proposal is warmly welcomed as an important first step towardsrestoringfaithin the carbon market. Butwork is not over yet:it is crucial that we maintain this positive momentum forthe broader ETS reform that we urgently need.We need a strengthened ETS which creates a levelplaying field and prevents governments across Europefrom developingnational measures whichlead tohigher energy costsandfurther fragmentation of the internal energy market.We therefore look forwardto the swift adoption by the Commission of its proposal for the broader structural reforms of the ETS andto further discussion onthe proposal.”

EURELECTRIC believes that the ETS is the key instrument to deliver the EU’s greenhouse gasemission reduction objectives. Structural reform of the ETS is however urgently needed to ensure that itgenerates a carbon pricewhichis consistent with companies’ investment decisions and drives majorinvestment in low-carbon technologies, including in renewables and energy efficiency, in a cost-effectivemanner.