EU Lawmakers Seek Limits on Carbon Fix Should Block Attempt FailEwa Krukowska
Lawmakers from the biggest group in the European Parliament are seeking to restrict a proposed carbon-market fix should their attempt to block the stopgap measure fail, according to a document obtained by Bloomberg News.
The European Union may delay the sales of no more than 900 million carbon allowances to reduce oversupply in the EU emissions-trading system and may intervene only once until 2020, according to an amendment to the carbon-market rescue plan proposed by three members of the European People’s Party.
The European Commission could impose temporary supply curbs if an assessment shows that they would have “no significant impact” on companies prone to relocating production to regions without emission curbs or if measures were proposed “with a view to compensate the potential increase of indirect costs,” according to the amendment sought by lawmakers Richard Seeber, Romana Jordan and Pilar Del Castillo.
The draft measure to delay emission-permit auctions, known as backloading, is the first step toward strengthening the world’s biggest cap-and-trade market after prices slumped to all-time lows in April. It is scheduled for a new vote in the environment panel on June 19 and then in the full Parliament on July 2 after the assembly declined to support it last month.
Eija-Riitta Korhola, the EPP lead lawmaker on the carbon fix who together with Seeber, Jordan and Del Castillo proposed blocking it in the first place, said yesterday that backloading was unlikely to be rejected in the committee. The ensuing plenary vote could be a close call, according to lawmaker Bas Eickhout, who supervises the stopgap plan in the Greens group.
Carbon allowances for delivery in December rose as much as 2.3 percent to 3.58 euros a metric ton today on the ICE Futures Europe exchange today and were at 3.55 euros as of 11:19 a.m. in London. The contract tumbled to an all-time low of 2.46 euros last month on concerns that policy makers will fail to agree a rescue plan for the market.
Eickhout and four other members of the assembly’s environment committee from various parties seek to limit the market intervention to one-time, according to a document obtained by Bloomberg News. The wording that the five parliamentarians are seeking is in line with a modification of the draft measure sought by Ireland, which holds the rotating presidency in the EU in first half of this year. That could make future negotiations by the Parliament and governments on the final language of the measure easier, according to Eickhout.
The Parliament is considering the first element of the carbon-market fix plan, or a draft change to the EU emissions-trading law that would enable postponing auctions of some allowances from 2013-2015 to 2019-2020. In the second step, a separate regulation will set out the details of the delay.
The strategy has divided policy makers and the industry. To be enacted, it needs qualified-majority support by member states and approval from the Parliament.
The EPP wants to change the timeline of auction delays and is seeking reintroduction of the permits “in a linear manner starting the year following the date of withholding the last allowances,” according to the amendment by Seeber, Jordan and Del Castillo.
Parliamentarians on April 16 voted 334 to 315, with 63 abstentions, to prevent the commission’s proposal to alter the EU emissions-trading law. They opted to send the measure back to the committee for further talks. Members of the panel had until 6 p.m. yesterday to propose amendments.