EU lawmakers back plan to withhold carbon permits
Proposal will prop up record low carbon prices by withholding 1.4bn permits from the third phase of the emissions trading scheme
Reuters in guardian.co.uk | 20 December 2011
The EU misjudged the amount of permits that industry needed to cover their emissions. Photograph: Reuters
European Union lawmakers backed a proposal on Tuesday to allow the European commission to prop up record low carbon prices by withholding 1.4bn permits from the third phase of the EU emissions trading scheme(ETS), sending prices 20% higher.
The majority of the members of the European parliament's cross-party environment committee backed changes to an energy efficiency bill that could give the commission the power to intervene in the carbon market it set up, after it misjudged the amount of permits EU industry needed to cover their emissions.
The EU ETS caps the emissions of some 11,000 factories and power plants in the bloc, forcing them to buy carbon permits to cover their emissions output.
The commission, which oversees the scheme, overestimated the amount of permits the EU's heavy emitters would need to cover their emissions in the period 2008-12, resulting in over-supply.
The supply glut and concerns about the EU economy have driven prices for EU Allowances (EUAs) down by some 60% over the past six months to a record low of €6.30 last week.
To try and rectify the problem, the commission will tighten the cap on emissions and auction the majority of permits in the third phase (2013-2020), instead of giving them away for free.
Investors and environmental groups renewed calls for intervention, however, saying plans for increased energy efficiency in the bloc would reduce demand for permits, putting more downward pressure on prices. The vote is the first of three ballots that could lead to a cut of 8% in the supply of permits during the 2013-20 trading phase.
Posts
No comments:
Post a Comment