Parliament approves measures to support carbon permit prices
The European Parliament has approved the “backloading” of CO2 permits. The plan freezes the auctioning of a portion of CO2 permits to boost their price and encourage firms to invest in low-carbon innovation. The measures, amended by the Parliament in July set stricter conditions for the freeze and are intended to restore the incentive effect of the Emissions Trading System, which is designed to curb CO2 emissions.
Under Parliament's amendment, already agreed with member states, the European Commission may, in exceptional circumstances, adapt the timing of auctions, provided an impact assessment shows that the sectors concerned will not face a significant risk of companies relocating outside the EU. The Commission will only be able to make one such adjustment, up until 2020, covering a maximum of 900 million allowances.
A growing surplus of emission allowances has occurred due to oversupply and the economic slowdown. This has seen the carbon price fall well below levels estimated when the ETS was created. The European Commission therefore proposed measures to enable it to “backload” – or delay - the timing of a portion of the credits to be auctioned.
The Council of Ministers is to vote on the legislation at its meeting on 16 and 17 December. The measures to correct the carbon market can then be implemented by the Commission under powers delegated to it. READ MORE