EU ETS gains crucial reprieve with vote in favour of backloading
The European Parliament's Environment Committee has voted in favour of amendments supporting carbon backloading throwing the flagging Emissions Trading Scheme (ETS) a precious lifeline.
If ratified by the European Council, the decision will see the withholding of 900 million European Union Allowances (EUAs) in a bid to lift the price of carbon after it plunged below €5 per tonne in January.
EUAs have lost 70% of their value since mid-2011 and the temporary withdrawal of carbon permits from the market, known as backloading, to help support prices, is seen by many as a way to reverse the downward trend.
This morning's vote to support a proposal to amend the auctioning timetable of the EU ETS was backed with a majority of 38 in favour, 25 against and two abstentions.
The plans must be finalised by the European Council, made up of the governments of the 27 EU Member States, but it may be subject to a vote by all MEPs before this stage.
Big business are likely to welcome news of the 'yes vote' after a group of 30 influential European companies and association called on MEPs to vote in favour of backloading in a joint letter last week.
Campaign group Sandbag welcomed the decision to support the proposal but emphasised that the backloading measure offers only a temporary reprieve for the under-fire scheme.
Sandbag's Damien Morris said: "Today's vote is a promising first signal that policymakers recognise the current threats to the EU ETS and are prepared to salvage it, along with the EU's international reputation for leadership on climate change.
"They must now press ahead to withhold these allowances from auction, before making the permanent repairs that the scheme desperately needs. That is the only way the policy can stay relevant and deliver the cost-effective emissions reductions it was designed for."
Other green campaigners cautiously welcomed the news, claiming the proposal would go some way to mitigate the severe problems faced by the EU's carbon market.
However, Greenpeace EU climate policy director Joris den Blanken said it was far too early to celebrate. "The EU's carbon market was saved from complete redundancy, but there's a long way ahead to ensure it becomes a meaningful tool for greening Europe's economy.
"The backloading proposal might slow the slide in the carbon price, but permanent cancellation of allowances and strong 2030 targets are essential if it is to achieve its aims," he said.