EU nations want to accelerate carbon supply cut
EU nations will accelerate the plan to raise carbon prices by delaying supply. One member state did not agree to do this, but the objection was not enough to prevent the required majority so the proposal will proceed through the European Council without further discussion.
This means the pace of the approval for the so-called backloading proposal. On January 8, officials signed off on a timetable for the European Commission to withhold 900 million carbon permits from auctioning schedules of its Emissions Trading Scheme over the next three years, but it needs to pass a three-month scrutiny period before the withdrawals can start.
The Commission wants the scrutiny period to be shortened so that it can start to withhold permits in the first quarter, allowing 400 million to be withheld this year. A later start could mean only 300 million permits are withheld this year and it could cause that companies invest in higher carbon technologies.
On Thursday the environment committee will hold a ballot on the measure. Analysts expect the committee to support the quicker process but that the extra time needed to hold the vote could mean the Commission is less likely to withhold the maximum number of permits this year.
Despite these problems, European carbon prices rose 2.9 percent on Tuesday for a third consecutive day of gains on expectations the European Commission will succeed in fast-tracking its plan to cut supply of carbon permits.