Europe’s biggest energy using companies urged lawmakers to avoid fast-track approval of a proposal to tackle a record oversupply of carbon permits that has divided policy makers.
The European Parliament’s environment committee yesterday delayed by a week a decision on starting accelerated talks with European Union states on a law change aimed at fixing a glut of emission allowances that pushed prices to a record low. The talks should start only after a debate in the full Parliament, the Alliance of Energy Intensive Industries said in a letter to lawmakers obtained by Bloomberg News.
Europe’s 54 billion-euro ($72 billion) cap-and-trade system, the world’s largest, imposes emission limits on about 12,000 power plants and factories to spur investment in clean technologies. The benchmark carbon futures contract has slumped from 31 euros a metric ton in 2006 to as low as 2.81 euros last month, a price the European Commission has said is too low to encourage trade in the emission allowances.
“The plenary debate, followed by a vote, would allow all members of the European Parliament to express their views and provide required political support for the final decision,” the AEII said in the letter.
The Parliament is considering whether to amend the EU emissions trading law that would make make explicit the European Commission’s right to delay the sale of some permits in a strategy known as backloading. The law change also needs the support of national governments.
The Alliance represents the interests of more than 30,000 European companies in industries including petroleum, cement, ceramic, paper and steel. It is opposed to backloading because it pushes up energy costs “without any environmental benefit,” according to the letter.
Members of the Parliament’s industry committee issued last month a non-binding opinion to reject the commission’s proposal. The environment committee, which is leading the work on the measure in the assembly, backed the draft law change yesterday in a recommendation for the full parliament.
While there are “significant” differences between the industry and environment committees, “in the two committees combined there were more votes opposing backloading than in favor,” the AEII said. “This highlights the wide differences in views and the importance of having a full, democratic and transparent plenary debate on this crucial issue for the EU.”
The environment committee is due to decide on Feb. 26 whether to authorize its chairman Matthias Groote to start negotiations with member states in the fast-track process. That would limit the number of times the full assembly would have to be consulted on the draft measure.
Otherwise, the whole Parliament would vote first on the environment committee’s position before talks take place between the assembly and states, known as a trilogue. That option, sought by the AEII, may delay a final verdict.