ETS: Commission aims to stabilise carbon price
By Anne Eckstein | Friday 20 July 2012
The European Commission is set to present, on 25 July, a proposal on the stabilisation of the European carbon market. The Commission has to make this proposal “urgently,” says MEP Peter Liese (EPP, Germany), highlighting the fact that for almost one year the price of a tonne of carbon has been below the €10 mark, while the 2008 directive on the EU’s Emission Trading Scheme (ETS) predicted an average price of €30 per tonne.
The Commission is due to bring two documents to the table: the first will detail how to extend the ETS to new sectors and the terms of the auctioning of allowances from 1 January 2013; the second will propose an adaptation of the agenda of the auctioning of allowances in 2013 – the idea being to postpone the trading of a certain volume of allowances (a freeze) for a determined amount of time.
The reasons for the low price of CO
2 include the over-allocation, ie the generous free allocation in the current period of ETS, the economic crisis and the current economic uncertainty.
“Market observers believe that the only reason why there is still a price for CO
2 (and the price is not zero) is because the market expects a political intervention,” Liese said, stressing that “the low price of CO
2 is very problematic”. The European Union risks not being able to reach its 20% goal in time ,” he warned.
Liese noted that certain member states, such as the UK – which has introduced a floor price – and the Netherlands, have already taken measures at national level, but warned that “a national solution is not the right one. We need to tackle the problem Europe-wide”.
Liese reminded the Commission of its 19 April commitment to present a proposal “urgently”.