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Europe strengthens its carbon market for a competitive low-carbon economy
The European Commission welcomes yesterday's vote by EU governments gathered in the Climate Change Committee to postpone the sale of 900 million carbon allowances in the 3rd phase of the EU's Emissions Trading System (EU ETS) which runs up to 2020. This marks a key step in restoring the short term balance in the European carbon market and sets the stage for the proposal of a further structural measure shortly.
In today's vote the Member States' representatives followed the Commission's recommendation to adopt an amendment to the Auctioning Regulation and change the timing of the back-loading schedule. This will postpone the auctioning of 900 million allowances from the years 2014-2016 until 2019-2020, while making the amount to be reduced in 2014 dependent on the start date of the back-loading.
The 900 million allowances will be reintroduced in 2019 and 2020. This means that the overall number of allowances in the EU ETS will remain unchanged.
The Commission hopes that back-loading can now begin quickly and is requesting the European Parliament and the Council to shorten the scrutiny period to conclude the process. The decision on the final length of the scrutiny period will then be taken by the Council and the European Parliament.
The European Commission presented the back-loading proposal in November 2012 as a way of rebalancing supply and demand and reducing price volatility without any significant impacts on competitiveness.
More background information can be found here.