Preparation for a hard Brexit - member states agree on safeguard mechanism for ETS (Brexit shield)

Member States agreed on the implementation of a safeguard mechanism for the European emission trading system (EU ETS) today in the climate change committee. In case of a hard Brexit -  which means that the UK would leave the EU without an agreement - the EU is preparing to maintain strong climate protection. The safeguard mechanism aims at preserving the integrity of the EU ETS in case that obligations of aviation operators and other operators from a member state cease. This would be the case in the event of a UK departure from the EU ETS in March 2019. The necessary changes in the EU ETS registry regulation where approved today by the member states.

Should the Brexit take place in March 2019, UK operators would not have to surrender allowances for their 2018 emissions, as allowances for verified emissions in the year 2018 must be surrendered by 30 April 2019, just after Brexit. The safeguard measure makes sure that aviation operators and other operators in the EU ETS may not use allowances that are issued from 1 January 2018 onwards by the UK.

“The EU institutions have already agreed that “allowances which are created as from 1st January 2018 (...) shall be identified by a country code and shall be made distinguishable according to the year of creation”  so that these marked allowances could no longer be surrendered in order to meet compliance obligations under the EU ETS. Otherwise we would have a massive effect on the carbon market”, explained environmental policy spokesperson of the largest political Group in the European Parliament (EPP, Christian Democrats) Dr Peter Liese.

“I still hope that there will be an agreement and that the UK will continue to be included in the EU ETS in the future and I am glad that the UK announced that they intent to adopt a law by the end of 2017 by which the compliance deadline for 2018 emissions would be advanced to before the date of the United Kingdom's withdrawal from the EU. However, in any case, it is good that we prepare ourselves for a hard Brexit. In this case, we should harm neither environmental protection, nor European enterprise”, said Liese.