Brussels, 20/11/2013 (Agence Europe) - On Wednesday 20 November, another step was taken towards the implementation of short-term reform of the European carbons market, through the temporary back loading of a maximum of 900 million surplus allowances at the beginning of the third period of the emissions trading scheme (ETS).
Member states' ambassadors meeting at Coreper approved the trialogue agreement on amending the ETS directive and clarifying provisions on the timing of auctions of greenhouse gas allowances (“backloading”). This was a simple formality because, on 8 November, the same ambassadors approved the single amendment passed by Parliament to this draft decision (see EUROPE 10960). The agreement still needs to be formally approved by the European Parliament and Council of the EU but does provide some relief with regard to the urgency with which the European Parliament and a majority of member states want to rectify the operational failures in the system. The price of carbon per tonne has fallen so low that it no longer allows the ETS to play its incentive role for attracting investment in clean technologies.
The president of the Environment Council, Valentinas Mazuronis, quoted in a press release, stated: “I expect that the decision we finalise today will produce right price signals for carbon market. The properly functioning EU ETS will promote reduction of greenhouse gas emissions in a cost effective and economically efficient manner. It will also drive the transformation towards the low-carbon economy and investments within the Union”.
Under the terms of the agreement, amendment of the timetable of auctions is subject to prior evaluation of the risks of carbon leakage in certain industrial sectors in which company relocation is a likely threat. The European Commission will only be able to intervene once on the market during the third period of trading (2013-2020). It is now for the Parliament and Council to formally adopt the decision amending Directive 2003/87/EC, which introduced the ETS. Parliament will vote in December. (AN/transl.fl)