Brussels, 25 July (Argus) – The European Commission today outlined draft proposals on the delay or “back-loading” of allowance auctioning in phase 3 (2013-20) of the EU emissions trading scheme (ETS). And the commission pledged to deliver a follow-up report after the summer that could recommend a permanent set-side of allowances as it seeks to reduce oversupply in the market.

Today's proposals set out three headline scenarios in terms of the volume of allowances that could be back-loaded in the first three years of EU ETS phase 3 — 400mn, 900mn or 1.2bn allowances. The proposals would have to be approved by member states and the European Parliament.

"It is now up to member states and the parliament to decide on what scenario and how many allowances they want to back-load,” commission climate action spokesperson Isaac Valero Ladron said. Valero Ladron commented on the need to contain an over-flooding of the market. "We have to do it now and be quick," he said. "The responsibility is on the member states and parliament to deliver before the end of the year."

After the summer break, the commission will finalise a carbon market report outlining a different number of options for more long-term structural changes in the market. "This might include, for example, a permanent set-aside of allowances or other different options to strengthen the carbon market," Valero said.

Internally, commissioners have been divided on how to rebalance the EU ETS. While energy commissioner Gunther Oettinger is understood to support a temporary measure to sustain the price of EU ETS allowances, others such as financial programming and budget commissioner Janusz Lewandowski and industry commissioner Antonio Tajani are said to be more hesitant. There is also resistance within the commission to more concrete measures to permanently raise the carbon price.

Send comments to feedback@argusmedia.com
ai/sp/dt 2.4

If you would like to review other ArgusMedia.com content options, request more information about Argus' energy news, data and analysis services.

Copyright © 2012 Argus Media Ltd - www.ArgusMedia.com - All rights reserved.