BusinessEurope, a Brussels-based employers’ federation, urged the European Parliament to reject a proposal by the European Commission to curb the oversupply of carbon permits as of 2013.
“Pre-emptive short-term measures would create a precedent, resulting in greater uncertainty, and could have major repercussions for European business,” BusinessEurope said in a letter to members of the environment and industry committees in the parliament obtained by Bloomberg News.
The lobby group’s objection relates to a plan known as backloading, which would delay the sale of carbon permits from 2013, when the third phase of Europe’s emissions trading system begins. The European Parliament must approve a change to the bloc’s emissions trading law before it can be started.
The change in law and backloading were proposed by the European Commission in July after after carbon permits dropped to a record. Under the commission’s proposal, removed permits would be returned to the market later in the third phase that ends in 2020, leaving the pollution caps intact.
Backloading would interfere with a discussion on a more comprehensive overhaul of the EU cap-and-trade program after 2020, according to BusinessEurope. The structure of the system needs improvements to deliver carbon cuts while avoiding harm to the competitiveness of European industries, and has to work in coordination with other EU energy policies, the lobby said.
EU carbon permits for delivery in December fell as much as 2.7 percent to 7.66 euros a metric ton on the ICE Futures Europe exchange in London, the lowest in four days. It was at 7.70 euros as of 11:08 a.m. in London. Permits traded at as little as 5.99 euros on April 4 and have lost 27 percent in the past year.