Emission Reductions and Low Carbon Investments

Steve Double Excerpts

Monday 12th December 2016 General Committees

[Steve Double (St Austell and Newquay) (Con)]

It is a pleasure to serve under your chairmanship, Mr Rosindell. It might help the Committee if I take a few minutes to explain the background to the document and the reasons why the European Scrutiny Committee recommended it for debate.

Since its introduction in 2005, the European Union emissions trading system has been a central component of EU and UK efforts to meet carbon reduction targets in a cost-effective and technologically neutral way, using tradeable permits that allow emissions of carbon dioxide. It was initially based primarily on allocation by member states, but the current phase, which covers 2013-20, introduced an EU-wide allowance system and an increased emphasis on auctioning allowances, rather than allocation.

Following the European Council’s agreement in October 2014 on a 2030 policy framework for climate change and energy, including a binding target to reduce EU greenhouse gas emissions by at least 40%, the European Commission advanced a proposal for a directive to give effect to that decision during phase IV of the ETS from 2021-30 and to make a number of other changes. Although the Government said that there were a number of detailed aspects that they wished to examine further, they had been pressing the Commission to produce proposals and therefore welcomed the document.

On 16 September, the European Scrutiny Committee took the view that the document was of some significance, given the importance of the ETS. It therefore had no hesitation in recommending it for debate in European Committee. Notwithstanding the outcome of the EU referendum on 23 June, it has since confirmed that view, on the grounds that the ETS is likely to impact the UK after 2020, irrespective of whether the UK is still an EU member state.

The EU’s 2030 policy framework involves separate reduction targets for sectors covered by the ETS and for the non-traded sector. Document 11483/16 seeks to deliver emissions reductions in the latter area by setting binding targets for 2030 for each member state. The Government see those proposals as likely to have a relatively limited additional policy impact on the UK, but since they complement the proposals for the EU ETS, the European Scrutiny Committee regards them as also relevant to the debate.

I look forward to hearing the Minister’s views on the issue and a lively debate.

[The Chair]

I remind the Committee that interventions are not allowed during the Minister’s opening statement.