EU Carbon Gains Most Since April as Italy, Spain Back Supply Fix
European Union carbon permits rose the most since April after Italy and Spain said they are in favor of an EU plan to sell fewer permits starting in 2013.
Allowances for December gained as much as 9.3 percent to 6.25 euros ($8.18) a metric ton and closed at 6.15 euros on the ICE Futures Europe exchange in London today. The European Commission, the EU’s regulatory arm, is due next week to ask the bloc’s nations to indicate their positions on a proposal to delay sales of 900 million allowances. The plan, known as backloading, aims to help prices rebound by curbing oversupply.
“Spain is in favor of backloading,” Federico Ramos de Armas, the country’s secretary of state at the environment ministry, said in an interview in Doha. “We need a stronger price signal.”
To pass, the draft measure needs 245 out of 345 votes in the EU Climate Change Committee, whose weighted ballot system favors larger countries. Spain has 27 votes and Italy 29.
“For keeping the price we need backloading,” Italy’s Environment Minister Corrado Clini said today in an interview in Doha.
Italy and Spain joined France and the U.K., which earlier this year signaled support for the commission’s proposal. The four countries have 114 votes together. Lithuania, with 7 votes, said yesterday that while it supports backloading in principle, it would like the commission to consult member states before adopting annual carbon-permit auction calendars.
While the Climate Change Committee, composed of experts from national governments, won’t hold a formal vote on the commission’s proposal, its Dec. 13 gathering should bring more clarity about member states’ position, said Eric Bickel, an analyst at Summit Energy Services in Louisville, Kentucky.
“The meeting may set the stage for some proposal to be agreed upon which may then be adopted,” he said.
A formal decision by EU nations on backloading can take place as early as March, after the European Parliament rules on an amendment to the bloc’s emissions trading law in a plenary vote, two EU officials, who declined to be identified, citing policy, said earlier this week.
Poland, which is leading efforts to stop the commission’s proposal, has 27 votes and needs 64 more against or abstaining to build a blocking minority. In Germany, which has 29 votes, the Environment Ministry and Economy Ministry are at odds over the plan. The country’s Economy Minister Philipp Roesler said last month that the nation may abstain in any voting.
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