Brussels, 21/01/2013 (Agence Europe) - On Monday 21 January, the European Commission appealed to EU member states to reach their position as soon as possible on the backloading proposal for CO2 quota surpluses. This proposal was presented on 25 July last to rectify shortcomings in the ETS, preventing it from playing its investment incentive role for energy efficiency and clean technologies. The sharp fall in CO2 prices to historic lows on the European fossil fuels market means, it argues, that swift adoption of short-term reform of the Emissions Trading Scheme (ETS) is necessary.
In response to the European press, which asked for a reaction to this record fall in carbon prices to less than €5 per tonne, Isaac Valero-Ladron, the spokesman for Connie Hedegaard, the European commissioner for climate action, said on Monday that, “yes, we have reached a record fall. Nonetheless, the price is an important sign for those investing in non-fossil fuels. We have two options, leave things alone or take action. The European Commission has put forward tools for taking action: temporary withdrawal of quotas and long-term structural options for managing excess quotas on the market. Analysts say that the fall will continue. We are calling on the Council and the European Parliament to take swift and decisive action”.
The political groups at the European Parliament are currently establishing their respective positions within the structure of the ongoing trilogue. The European Parliament plenary session vote is planned for March or April. “Some countries have already announced their support and others their opposition. Germany and the United Kingdom have not yet announced their positions. We want all member states to decide and support this reform”. Last December, during the most recent Environment Council under the Cypriot Presidency, Poland (supported by Central and Eastern European countries) clearly indicated that it could not accept this temporary backloading of 900 million in CO2 quotas, given the negative impact of this decision on these countries' budgetary programming (see EUROPE 10754). The European Commission's hope of obtaining an agreement of principle from the Council before the end of 2012, therefore, went up in smoke.
The spokesman added that “member states will come to a decision after the Parliamentary plenary session. The Commission wants them to do so as soon as possible after the Parliamentary vote, which will allow for the backloading of susplus quotas on the market after the summer holidays”. It is currently estimated that the number of trading permits which have not been traded, but held in reserve, number 2 billion. “Last Friday, the German authorities had to cancel the public sale of trading permits because there were no buyers”, Valero-Ladron stated.
No sooner was the backloading of the 900 tonnes of CO2 from 2013-2015 announced to conclude the short-term reform of the ETS from the beginning of its third trading period, than the European Commission set about the long-term reform of the ETS last November, to stabilise fossil fuel prices by rectifying quota supply and demand imbalances (see EUROPE 10730 and 10729). (AN/transl.fl)