European Parliament committee approves carbon reform from 2019

LONDON (Reuters) - Members of the European Parliament on Tuesday approved a compromise deal to begin a new reform of the EU Emissions Trading System (ETS) from January 2019. MEPs in the Committee of Environment, Public Health and Food Safety voted 49 in favor; eight were against and two abstained. Known as the Market Stability Reserve (MSR), the reform would remove some of a huge surplus of carbon allowances that has depressed the price of allowances on the ETS. Benchmark EU carbon prices were down 0.05 euros at 7.34 euros a metric ton at 1416 GMT. The plan still requires endorsement from a full session of the parliament in July, although it has already been approved by diplomats representing the 28 member states. Poland, whose economy depends on highly-polluting coal, led opposition to the plan, but only temporarily got sufficient support to block it. Some energy intensive industries have also objected, saying that driving up the price of allowances would give them a competitive disadvantage because it would inflate energy prices. However, utilities, such as E.ON and RWE, and big member states, such as Britain and Germany, were keen advocates of early reform to boost investment in low or zero carbon power generation. EU officials say they expect endorsement from the plenary European Parliament in early July will be a formality. (Reporting by Nina Chestney; editing by Susan Thomas)