Brussels, 09/01/2014 (Agence Europe) - On Wednesday 8 January, another step was made towards implementation of short-term reform to the European carbons market. Member state experts on the EU's regulatory Climate Change committee approved the decision to postpone the sale of 900 million carbon allowances in the 3rd phase of the EU's Emissions Trading System (EU ETS) in an attempt to increase carbon prices and help the ETS act as an incentive for investment in clean technology and the renewable energy sector. The European Commission immediately welcomed the fact that the experts had followed its recommendation. Nonetheless, it did call on Parliament and the Council to shorten the text scrutiny period so that backloading could be introduced as soon as possible.
Connie Hedegaard stated that “back-loading is now a reality, and the Commission hopes that the first allowances can be back-loaded very soon”. She did, however, point out that the short-term reform is no panacea and that, “while back-loading will help stabilise the carbon market in the coming years, we must also tackle the more structural challenges”. She added that the Commission will address these challenges when it proposes the integrated framework for a climate and energy to 2030, planned for 22 January.
The decision approved by member state experts involves an amendment to the auctioning regulation and change the timing of the backloading schedule. This will postpone the auctioning of 900 million allowances from the years 2014-2016 until 2019-2020. This attempt to address the imbalances between supply and demand of quotas on the market, which had experienced a sharp fall in the price per tonne of carbon (€3 instead of €20-30 as initially expected) was described as an emergency situation in November 2012. It will be accompanied by structural reform of the ETS, for which the Commission also outlined a number of options in its communication of November 2012 (see EUROPE 10730). (AN/transl.fl)