Big business calls for 'yes vote' to revive EU ETS
A group of 30 influential European companies and associations have called on MEPs to vote in favour of amendments supporting carbon backloading, in an attempt to revive the EU's Emissions Trading Scheme (ETS).
In a joint letter, the signatories, who include E.On, Shell, Unilever and Statoil, argue that auctions for carbon permits must be postponed in order to restore the credibility and relevance of the EU ETS.
The Institutional Investors Group on Climate Change (IIGCC), which represented around €7.5trn in assets, also joined the calls for a 'yes' vote on February 19.
The move comes after news last month that the price of carbon traded within the ETS had fallen to record lows with European Union Allowances (EUAs) dropping to below €5 per tonne of CO2.
EUAs have lost 70% of their value since mid-2011 and the temporary withdrawal of carbon permits from the market, known as back-loading, to help support prices, is seen by many as a way to reverse the downward trend.
In the letter, organisations voiced their concerns that a failure of the EU ETS would distort the internal market with "the emergence of a patchwork of 27 different energy and climate measures ranging from regulations to taxation."
The companies said they recognised the need for longer term structural reforms of the EU ETS but claimed these would take time.
IIGCC executive director Stephanie Pfeifer said: "The collapse of the carbon price and the direction of EU energy policy are creating uncertainty amongst investors concerned by climate change and weakening the case for investment in Europe's low-carbon sector.
"A properly functioning Emissions Trading Scheme is essential to the financing of Europe's low-carbon future and critical to tackling the dangers of climate change.
"MEPs can take action next week by voting in favour of the proposal that would allow the back-loading of carbon credits.
"A yes vote would send a positive signal about the European Parliament's commitment to its flagship emissions reduction scheme and begin to restore investor confidence in the EU's energy policy.