The EU ETS is the European Union’s flagship climate policy to reduce greenhouse gas emissions at the least cost whilst stimulating investment in the low-carbon economy. A cap is set on the total amount of certain greenhouse gases that can be emitted, and within the cap, companies receive or buy emission allowances which they can trade with one another as needed.
The Environment Council has agreed a measure, known as the Market Stability Reserve (MSR), to tackle the surplus of allowances built up in the ETS over the last five years.
The Council also agreed the EU negotiating approach to the Paris COP. These set out a strong and positive position for the final negotiations to secure an ambitious global deal to tackle climate change.
Secretary of State Amber Rudd said:
“I welcome today’s agreement, which the UK has been driving forward and will enable businesses to remain competitive and grow as we move to a low carbon future.
“With just over 2 months to go until the climate change conference in Paris we are working hard to land a robust global deal that will mark the beginning of a global step change in efforts to limit global warming to 2 degrees in the long term.”