MEPs on the European Parliament's energy committee (ITRE) voted today (24 January) to reject the European Commission's proposal to intervene in the EU's struggling carbon trading market.
The price of carbon in the EU Emissions Trading Scheme (ETS) fell below €5 this week, an all time low. When the scheme was designed, it was expected that the price at this time would be around €30.
Last year the Commission proposed to delay the auctioning of 900 million allowances in the scheme until 2019 as a short-term measure to boost the price. But it needs the Parliament and member states to amend the ETS directive to do so, and there has been unexpected resistance from both.
The energy committee's opinion was an advisory one. The Parliament's environment committee is the lead committee on the dossier, and they will vote 19 February. But the vote still caused the price of carbon to plunge by 40% during Thursday's trading, to a record low of €2.81. The price recovered to above €4 by the end of the day.
"Today's vote in the Industry, Research and Energy Committee will strengthen the position of all those countries, like Poland, opposed to climate policy tightening in times of crisis,” said Polish energy committee member Konrad Szymanski, a member of the ECR group, after the vote.
Environmental campaign groups, which are urging MEPs and member states to urgently adopt the backloading proposal, said they expected a rejection by the energy committee but were heartened that the outcome of the vote – 42 against 18 with 11 abstentions – was closer than expected.
“This was actually a very positive vote,” said Sanjeev Kumar of E3G. “We congratulate those MEPs who voted against rejection and abstained. Their support means backloading is alive and kicking and much more likely to be supported in the more important plenary vote.”
During a debate on the backloading proposal today in the environment committee, many MEPs voiced concern about the prospect of giving the Commission the authority to intervene in the market.