The Bill that will transpose into Estonian law the EU directive which aims to enhance cost-effective greenhouse gas emission reductions and low-carbon investments, initiated by the Government, passed the second reading in the Riigikogu today.
Another aim of the Bill on Amendments to the Atmospheric Air Protection Act (54 SE) is to bring the Act into conformity with the EU Regulation amending the purposes of the use of revenues generated from the auctioning of aviation allowances, and the decision concerning the establishment of a market stability reserve for the Union greenhouse gas emission trading scheme.
The directive updates the system for greenhouse gas emission allowance trading and specifies the rules for the following trading period, 2021-2030. In addition to that, additional opportunities to make investments will be created. The main new possibility in the following trading period will be the Modernisation Fund which will allow Estonia to support investments in the modernisation of energy systems and in the transition to a low-carbon economy in other sectors. The Government will also be given a possibility to implement the measure under which allowances will be allocated to installations for electricity generation which make investments in the modernisation of the energy sector.
In addition, the purposes of the use of revenues generated from the auctioning of aviation allowances will be amended, and as of 2021 aircraft operators will be obligated to decrease by a linear factor of 2.2 the quantity of allowances allocated for free, similarly to stationary installations.
The Act will also be brought into conformity with the decision of the European Parliament and of the council concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme.
The explanatory memorandum notes that the aim of the market stability reserve will be to control the surplus of allowances in the market. So far, the surplus has been very large, and therefore the price of allowances was low until the beginning of 2018. The European Commission will begin to gradually reduce the allowance surplus by increasing a certain part of the market stability reserve. The market stability reserve will apply for the first time in 2019. The European Commission will allocate allowances to a certain extent for as long as the surplus remains large. Should the quantity of allowances in the market for some reason fall below the critical level, the European Commission will place the allowances from the market stability reserve back on the market.
The verbatim record of the sitting (in Estonian).
Video recordings of the sittings of the Riigikogu can be viewed at https://www.youtube.com/riigikogu (Please note that the recording will be uploaded with a delay.)
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