Connie Hedegaard: "It is not wise to continue flooding the market for emission allowances"
The European Commission today took steps to address the surplus of emission allowances in Europe's carbon market. It proposed a Decision to clarify the provisions of the Directive governing the EU Emissions Trading System (EU ETS) on the timing of allowance auctions. This follows a review of the timetable for auctions in the third phase of the EU ETS between 2013 and 2020.
Commissioner Connie Hedegaard said:
"The EU ETS has a growing surplus of allowances built up over the last few years. It is not wise to deliberately continue to flood a market that is already oversupplied. This is why the Commission today has paved the way for changing the timing of when allowances are auctioned. This short-term measure will improve the functioning of the market. If the political will is there, all the necessary decisions can be taken before the next auctioning phase starts at the beginning of 2013. Now it is up to the European Parliament and Member States to deliver. After the summer recess, the Commission will also finalise the options for long-term structural measures.''
As well as proposing the Decision, which would clarify that the timing of auctions may be changed by amending the Commission Regulation on auctioning, the Commission also launched a public consultation on a draft text of an amendment of that Regulation. The amendment would postpone the auctioning of a certain volume of allowances – yet to be decided – until towards the end of phase three.
A first report on the functioning of the European carbon market, due from the Commission later this year, will provide an opportunity to launch a thorough debate on what structural measures might be needed to address the current challenges facing the EU ETS.
Audio: Commissioner Hedegaard answers questions on the proposed Directive
- ‘What are you proposing today?’
- ‘Why are you proposing this?’
- ‘What are the tangible benefits of such a proposal?’
- ‘When do you expect that this change can be adopted?’
- ‘Will this be it or will you come out with other proposals to strengthen the market?’