May 26 2016

One instrument or two? A plea to ITRE and ENVI MEPs (and the Council)

It is not 100% clear whether the EC wants to create one instrument combining 400 M monetised EUAs and 50 M other monetised EUAs, or two instruments each fed by their respective source. The text in its proposal on an ‘Innovation Fund’ is divided into two sections (see page 19 here). The first refers to 400 M EUAs, uses language from the European Council Conclusions of 23-24 Oct 2014 and does not specify from which part of the ETS the EUAs should be drawn. The second refers to 50 M EUAs to come specifically from the MSR and uses language from the MSR Decision.

The 400 M EUA section talks of the need to support projects in “geographically balanced locations”, while the 50 M EUA section says projects in “all Member States” will be supported. The 50 M EUA endowment will “include small-scale projects,” while the 400 M EUA block puts no restrictions on size. The 400 M EUA section talks of the conditions for disbursement, while the 50 M EUA section describes the competition, saying it must be run on “on the basis of objective and transparent criteria”.

  1.’s comment

    It’s a mess

    While there is ambiguity in the legal text, the official detailed Q&A, by contrast, makes it clear that the EC wants to launch one single ‘Innovation Fund’, not two funds with different rules. Table 41 of the Impact Assessment suggests the same thing. Amendments by Parliament and Council will hopefully iron out inconsistencies in phrasing in the legislative text so that it reads more like a description of a single, unified instrument. A sub-paragraph could describe where the 450 M EUA will come from, saying that 50 M EUA of them are from the MSR and constitute the portion that will be available before 2021.