The European parliament has thrown the EU Emissions Trading System (ETS) a lifeline by voting in favour of 'backloading' of emission permits.
MEPs have thrown the EU Emissions Trading System (ETS) a lifeline by voting in favour of ‘backloading’ of emission permits. The plan suffered a severe setback in April when the same parliament voted to reject the European Commission’s claim to a right to intervene in the European Trading Scheme’s mechanism.
The move to allow backloading – or the temporary removal of emission permits from the ETS – will lead to a small rise in the carbon price as well as boost confidence in the ETS, said Rémi Gruet or the European Wind Energy Association (EWEA).
"It is crucial that the EU Member States now agree backloading as soon as possible," said Gruet. "Then the European Commission should propose a 2030 Climate and Energy Package, with headline renewable and GHG reduction targets, without delay."
Carbon prices in the ETS have been languishing at historically low levels because of an oversupply of emission permits and a drop in energy demand during the economic recession.
Backloading emission permits will help to reduce supply in the ETS. According to Thomson Reuters Point Carbon, the current oversupply in carbon permits has meant that the market’s overall value was down last year, for the first time since the ETS launched in 2005.