The European Parliament’s environment committee has agreed to accelerate the adoption of a rescue plan for the bloc’s emissions market, which the European Commission wants to start as soon as possible.
Carbon prices rose as much as 3.6 per cent after the panel voted 43 to 13 to shorten the measure’s usual three-month scrutiny period in the Parliament.
Bloomberg newsagency reports the recommendation now needs approval from all heads of the assembly’s other committees before it goes to a plenary, which can end the obligatory evaluation before an April deadline.
“I have already sent a letter to the Parliament’s committee chairs,” Matthias Groote, the head of the environment panel and the lead politician on the plan, said in an interview in Brussels.
It is not yet clear when the Conference of Committee Chairs will decide on the matter, he said.
The rescue plan involves delaying the sale of some permits to help prices rebound from levels the commission says are too low to discourage burning fossil fuels and spur investment in renewable energy.
The cost of emitting one tonne of carbon dioxide has plunged 81 per cent since 2008 amid a surplus of allowances exacerbated by the economic slowdown.
EU carbon permits for delivery in December rose to as high as €5.77 a tonne before trading at €5.73 on the ICE Futures Europe exchange in London.
The benchmark contract fell to a record low of €2.46 in April last year.
The market fix, known as back-loading, would delay the auction of 900 million carbon permits in 2014-16 until the end of the decade.
For the fix to be enacted, the Parliament and EU governments must finish their scrutiny.
The EC, the EU’s regulatory arm, then needs about three weeks to adopt the plan and notify market participants of the new auction calendar.
Bloomberg reports should back-loading begin in March, the EU would postpone 400 million permits this year, according to the draft regulation.
If the evaluation isn’t accelerated and back-loading begins in the second quarter, 300 million allowances would be delayed at government auctions.
“I still see an 80-per cent chance of getting it through in time to back-load 400 million allowances this year,” said Matteo Mazzoni, an analyst at Bologna, Italy-based Nomisma Energia, an adviser to energy companies, governments and banks.
“Today’s vote was highly expected. Much less granted is the support of all the other committees,” he said.
The environment committee rejected two draft resolutions to block back-loading.
Some members of the panel and the Parliament’s industry committee wanted to prevent the temporary supply curbs on the grounds that the market intervention was breaching EU emissions trading law.
The Conference of Committee Chairs now needs to decide whether to approve Groote’s request for a shorter scrutiny period. Such a decision needs to be unanimous.
“There are still quite a few steps to pass and if any if these fails, or even gets delayed, we will see 300 million tons being back-loaded in 2014,” said Bostjan Bandelj, a director at trading company Belektron in Llubljana, Slovenia.
“The industry committee vote showed that there is still desire among some parliamentarians to block or delay back-loading implementation. I give the 400-million scenario only a 25 per cent chance.”
Once announced in plenary, a recommendation to shorten the scrutiny period is deemed to have been approved if there’s no opposition within 24 hours, according to the assembly’s rules.
A political group or at least 40 members of the Parliament can raise objections.
That would require putting the recommendation to a vote in which a simple majority in favour is sufficient for approval.
“It will most likely be for a decision by the second plenary in February,” Mr Groote said last week.
