EU Parliament’s Largest Bloc Prepares CO2-Fix Backup Plan

The European Parliament’s largest political party is preparing a backup plan in case it fails to block a European Commission proposal to fix the carbon market, according to two party officials.

The European People’s Party will decide tomorrow on the final wording of the amendment, which is intended to restrict the commission’s plan, and will agree a voting strategy on the carbon fix April 15, the officials said after a meeting of the party’s working group on the environment in Brussels today.

The EPP’s fall-back plan would be put to a vote if its amendment to reject the rescue plan outright is shot down by Parliament, the officials said on condition of anonymity because the talks were private. The full Parliament is scheduled to vote on April 16 on a draft emissions trading law change that would enable delaying auctions of some carbon permits, according to the assembly’s preliminary agenda.

The commission’s proposal to help prices in the carbon market rebound from record lows has divided policy makers and industry. The emergency strategy to temporarily curb oversupply, known as backloading, needs support from EU governments and from the Parliament if it is to be implemented.

EPP lead lawmaker on the measure Eija-Riitta Korhola said earlier today that the “vast majority” of the group’s lawmakers oppose the commission’s plan. Carbon prices slumped as much as 10.4 percent to 4.66 euros following her comments and were at 4.80 euros on the ICE Futures Europe exchange as of 4:45 p.m. in London.

Voting Strategy

The party, which controls just over one-third of the Parliament’s 754 seats, will decide on the voting strategy related to its two amendments one day before the assembly as a whole votes on the commission’s plan. The plenary makes such decisions by a simple majority.

The EPP will need to agree on whether to support the market rescue strategy if both the proposal to reject the commission’s plan and the fall-back amendment fail, the officials said. The group’s members voted 15 to 7 against a report supporting the commission’s plan in the Parliament’s environment committee in February. Two EPP members abstained.

While the committee backed the report by 38 to 25 votes, with two abstentions, it stopped short of mandating Matthias Groote, a Social Democrat member of the Parliament, to start talks with national governments on the final wording of the draft measure. The decision was transferred to the plenary, which will decide on the future of the proposal next week in Strasbourg, France. Members of the EPP are not obliged to vote in line with the party position though detractors face some punishment.