Negotiations between the European Parliament and Council of the European Union on ‘backloading’ the Emissions Trading Scheme (ETS) have been given the green light by the European Committee of Permanent Representatives.
A surplus of emissions allowances in the ETS – partly the result of reduced economic activity during the recent downturn – has pushed down the cost of the allowances, making it cheaper to emit greenhouse gases.
Some have called for ‘backloading’ – delaying the auction of new emissions allowances – in order to cut down the surplus and push the carbon price back up.
The European Parliament has already approved the ‘backloading’ of 900 million allowances, having voted on the measure in July. The Council of the European Union also needs to give its approval to the measures.
The European Committee of Permanent Representatives – which sets the agenda for the Council – has now given the go ahead for the Presidency of the Council – currently held by Lithuania – to start negotiations between the Council and the European Parliament.
Dirk Forrister, President and CEO of the International Emissions Trading Association (IETA) said: “European Member States sent an important signal that they want to reach an agreement on backloading. This is a first step – but a critical one. It is now essential for negotiations between the co-legislators to progress rapidly so that a decision on backloading can be taken before the end of the year.”