Brussels, 22/12/2010 (Agence Europe) - Generally speaking, the European carbon market (set out in the ETS directive) is subject to adequate oversight, but an additional effort may be needed in the spot market. This was the conclusion reached by the Commission in a communication published on Wednesday 22 December on the regulatory oversight of the carbon market. If necessary, a legislative proposal to this effect could be presented in 2011.
In a press release, Connie Hedegaard, Commissioner for Climate Action, explains the interest of regulatory oversight of the carbon market in the following terms: “The European carbon market is a relatively young market which has grown rapidly during its first six years of operation, both in size and sophistication. With a climate crisis and an economic crisis, the world more than ever before needs cost-effective means of reducing greenhouse gas emissions. It is therefore important that the market can continue to expand and safely be relied upon to give an undistorted carbon price signal to investors and decision-makers in boardrooms across the EU. Over the last years, the market has reached a size which makes it a potential target of fraudulent practices. Therefore, as the market matures and grows further, it is critical that it continues to be subject to appropriate and effective regulatory oversight”.
As things stand, the Commission communication evaluates the level of regulatory oversight of the European carbon market, an exercise that is set out in the ETS directive to be carried out before 31 December 2010. The Commission describes the current developments on the energy and financial markets, which have an effect on the carbon market, and draws up a list of the different measures that can be envisaged with a view to maintaining and safeguarding the integrity of this market in full expansion.
At a second stage, the Commission will examine in greater detail the structure of the carbon market, the level of market oversight and the available measures possible, including the classification of allowances as a financial instrument.
Online consultation with stakeholders will be conducted during the first half of 2011 and its results will fuel an in-depth impact assessment. On the basis of the results of this work, it will be decided whether or not to present a legislative proposal.
Market players and other stakeholders are invited to take part in the initiative and to support the efforts deployed by the Commission with a view to finding operational solutions that will guarantee development of the European carbon market. (A.N./transl.jl)