Timing of auctions of greenhouse gas allowances:
- extracts of the debate on the report Matthias GROOTE (S&D, DE)
Première transmission: 15/04/2013
Strasbourg, France - European Parliament
Fin de production: 15/04/2013
MEPs have debated on the report carried out by Matthias GROOTE (S&D, DE) on auctions of greenhouse gas allowances. The aim of this report is to clarify the legislative provisions on the timing of auctions of allowances as laid down in Directive 87/2003/EC. MEPs will vote on Tuesday on whether to withhold the auction of a number of CO2 emission quotas in order to boost the price of polluter permits. The original policy intention of the European Union Emissions Trading System (EU ETS) was to set up a measure that would stimulate the carbon price, thus influencing in a positive way investment in low carbon technology and renewable energy. However, as the supply of allowances is far exceeding the demand, the carbon price has diminished from around 30 EUR/ton CO2 to around 7 EUR/ton CO2. By the end of 2011 a surplus of 955 million allowances had accumulated and is set to grow. Despite witnessing a reduction of emissions since the start of the EU ETS, the system currently faces serious imbalances. Since 2008, emissions have been reduced by more than 10%, but this reduction can be largely explained by the economic downturn which has lead to the reduced economic activities and production.
Only the original language version is authentic and it prevails in the event of its differing from the translated versions.
||Exterior shot of the EP, Strasbourg.
||SOUNDBITE (German) Matthias GROOTE (S&D, DE), rapporteur and Chair of the ENVI Committee: "Back-loading is something we need because with a price of 2'80 €, that was the lowest that we had in recent weeks and months, there is no incentive for a climate friendly production. We have seen that industry, and even the German catholic and evangelical church, came out in favour of back-loading. Back-loading, the short-term removal of certificates won't be a definitive solution; that means that we are just buying time".
||SOUNDBITE (German) Matthias GROOTE (S&D, DE), rapporteur and Chair of the ENVI Committee: "It happens every day in the European Union, that Parliaments intervene in the markets if they are not functioning properly. In 2008, during the debate on the climate and energy package, we made a mistake. The majority of the House was in favour, there were too many certificates put into the system and now is payback time. In 2011 955 million additional certificates were available, and if there are too many certificates in the system, the prizes would drop. That was our mistake".
||SOUNDBITE (ENGLISH) Connie HEDEGAARD, Commissioner for Environment: "The crisis has caused the fall in industrial production in the EU and thus, the demand for allowances. This has resulted in the build up of a huge unexpected surplus of allowances that undermines the proper functioning of the system which was designed to work through scarcity. In short, the crisis has dramatically affected the EU ETS, just as it has affected so many other areas of economic activity in Europe".
||SOUNDBITE (ENGLISH) Connie HEDEGAARD, Commissioner for Environment: "The sooner we get clarity on back-loading the better. So that we can focus on what really matters, for instance the 2030 framework and give the predictability that our industries need for the medium and longer term. The backdrop to all this is that climate whinge is getting worse, EU's dependency on imported fossil fuels is increasing and so is also our bill to pay for our energy".
||SOUNDBITE (ENGLISH) Connie HEDEGAARD, Commissioner for Environment: "I appeal to you as the European Parliament, to support the European ETS as a common European tool. The alternative to doing this is not 'nothing', is not that then we have just very very cheap prices and then nothing happens. The alternative to securing the European ETS is a patchwork of 27 different national regulations".
||SOUNDBITE (Italian) Amalia SARTORI (EPP, IT), Chair of the ITRE Committee: "The reason for our rejection of this new approach is that in our Committee there is a firm conviction that there is no place for intervention in a market which was created to be free and self-regulating. Therefore we feel that there will be oscillations between supply and demand, but this is a self regulating market which will sort itself out. Our position is reflected in our vote. We also acknowledge that Europe is in a very serious crisis, particularly in the manufacturing industry and the steel industry, which are affected seriously by dramatic falls in employment levels and the closure of factories. In these circumstances, an additional type of tax is an untenable proposition."
||SOUNDBITE (English) Chris DAVIES (ALDE, UK): "We look forward to structural reforms. We look forward to the Commission bringing forward proposals to implement what this Parliament has called for by a very large majority, which is to achieve a 40% CO2 reduction by 2030. In the meantime we have this measure, a sticking plaster some would say, but if you are bleeding, you put a sticking plaster on your way to the hospital. It's necessary to take this sort of action".
||SOUNDBITE (English) Bas EICKHOUT (Greens-EFA, NL): "Have you been reading the Financial Times this morning? where industry is asking to support back-loading. Industry like Shell, Ion, EDF… not really my usual allies I must say, and I even find myself in their gang. Why is that? Because they see that their innovation is being killed in Europe. They see that coal-fired power plants are now the cheapest options to buy energy and that is increasing in Europe, that's the problem we are having and that's what we are talking about".
||Cutaways (4 shots)