Editing MSR talks resume but EU governments "far apart"

(Montel) European governments remained "far apart" over a proposed ETS market stability reserve (MSR) as EU Council officials sought to revive talks on Wednesday afternoon that stalled earlier in the day, officials said.

Negotiations would resume in the afternoon, but there was only a "small chance of a breakthrough this evening", an EU diplomatic source told Montel.

As current holder of the EU presidency, Latvia wants member states and the European Parliament to agree a legislative text for the [http://www.redshawadvisors.com/research/ carbon market] fix before its term ends on 30 June.

However, member states refused in the morning to give it a mandate to negotiate with MEPs on their behalf, according to an EU Council official.

National representatives broadly agreed on the need to start talks with the parliament, but some wanted to do so only "on their own terms", the official said.

Entrenched positions
The EU's 28 members are divided over the timing of the scheme, with Germany and the UK amongst several pushing for a 2017 start, while Poland has mustered a blocking minority of governments opposed to starting the MSR before 2021.

Meanwhile, the European Parliament has already compromised on an end-2018 start for the MSR, and Dutch Green Bas Eickhout told Montel it was "shameful" that member states were unwilling to move from their entrenched positions.

"The Polish trench is the deepest - I get the feeling they want to blow up the ETS," Eickhout said.

The blocking minority is narrow, however, and the diplomatic source saw the potential for deals that could "unlock support" for an earlier start.

Still up for debate are the fate of 900m backloaded emissions allowances, unallocated allowances, financial support for low-carbon technologies, and measures to shield industry from higher carbon prices, the source said.

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