EU States May Lose 225 Million Euros on Carbon Auction Delays

European Union member states may lose a total of 225 million euros ($295 million) in revenue for national budgets should the bloc adopt a proposal to delay sales of carbon permits, according to a Polish government study.

The draft measure to postpone auctions of 900 million allowances, known as backloading, will cut income from sales in Cyprus, Poland, Estonia, Czech Republic, Bulgaria and Romania by about 1.9 billion euros in 2013 to 2020, according to the study e-mailed today by the Polish Environment Ministry. Revenue for the other EU 19 countries will increase by about 1.7 billion euros. Revenue for Hungary and Lithuania will be little changed.

The six central and eastern European countries will be the worst off due to the proposal because they are seeking exemption, also referred to as a derogation, from a requirement that power plants purchase all allowances from 2013, according to the report, which will be presented at a Dec. 17 ministerial meeting in Brussels.

“The quota of allowances to be auctioned in the beginning of the third period at the anticipated high prices will be reduced twice: because of the backloading mechanism and because of derogation,” the ministry said.

To contact the reporters on this story: Ewa Krukowska in Brussels at ekrukowska@bloomberg.net; Marek Strzelecki in Warsaw at mstrzelecki1@bloomberg.net

To contact the editors responsible for this story: Alessandro Vitelli at avitelli1@bloomberg.net; Lars Paulsson at lpaulsson@bloomberg.net

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