The European Parliament has adopted a proposal to reform the EU Emissions Trading System (ETS) Directive for the post 2020 period, putting forward the Innovation Fund for clean energy projects.
The ETS is EU’s flagship policy to combat climate change by reducing the emissions from more than 11,000 installations in the power sector and energy intensive industry through a market-based cap and trade system.
Under the reform proposal for ETS, approved yesterday February 15, 2017, by 379 votes to 263, with 57 abstentions, an Innovation Fund is proposed to finance clean energy and low carbon projects, including ocean energy projects, by auctioning ETS allowances.
Commenting on the vote in the European Parliament, Kasparas Kemeklis, Policy Officer at Ocean Energy Europe, said: “The vote is a step in the right direction for funding the energy transition. The Parliament proposes to increase allocations to an Innovation Fund from 400 to 600 million allowances. This will allow renewable energy demonstration projects, like ocean energy farms, to get the extra financing needed to get into the water.
“We now urge national governments to accept this proposal that will help fund their renewable energy ambitions.”
In April last year, Europe’s renewable energy industry associations, coordinated by Ocean Energy Europe, published a position paper that sets up principles for the new Innovation Fund, which by using emissions trading certificates from ETS could raise between €4.5 billion and €11 billion for innovative renewable energy and industrial projects.
Namely, the industry proposed the creation of a fit-for-purpose fund that would comprise the appropriate financial instruments to complement upfront funding and revenue support for the demonstration stage projects, capable of bearing the risk of innovative project under-performance, which would in turn help remove risk and make projects more investable.
The renewable energy industry also suggested to limit the awards for individual projects to €300 million.
Welcoming the vote, EU Commissioner for Climate Action and Energy, Miguel Arias Cañete, said: “The vote provides a clear outcome after more than a year of discussions in Parliament, and it demonstrates the European Union’s commitment to turning the Paris Agreement into reality through concrete action on the ground. Now the EU ETS revision is on the Council’s table and we hope they can swiftly reach an agreement to kick-start negotiations.”
Members of the European Parliament (MEPs) will now enter into negotiations with the Maltese Presidency of the Council in order to reach an agreement on the final shape of the legislation, which will then come back to Parliament, Ocean Energy Europe informed.