The European Parliament committee for the environment, public health and food safety, passed plans to backload sales of credits under the EU emissions trading scheme (ETS) today.
They voted 38 to 25 in favour of the scheme, which hopes to boost the price of carbon.
Thomson Reuters Point Carbon predicts the move, to withhold 900 million carbon allowances from the ETS until 2018-2020, will give a short term price boost of up to €2 per tonne. However, the market dropped from €5.90 to €4.50 in the 30 seconds following the vote.
Next week the committee will decide whether or not to refer the proposal to the full European Parliament for approval, prior to the European Council for sign-off.
Green spokesperson and Netherlands MEP Bas Eickhout said: “MEPs have today taken a step towards shoring up the flagging EU carbon market.”
Eickhout said the measure was a temporary fix and deeper action was needed. “We urgently need more durable structural solutions, notably on permanently retiring emissions allowances to address the oversupply, and not simply postponing the auctioning of permits.”
Chief executive of Eon, Johannes Teyssen, said “Nobody is investing any more. Returns are totally unavailable. There is no signal whether to invest in low carbon or high carbon. The message is that for the next 10-15 years, there is no reason to invest in low-carbon technology.”
SSE head of European affairs Bas Batelaan also called for a more ambitious package of measures to spur the EU’s transition to a low-carbon economy.
“There is a need for a structural, longer-term solution and we are therefore strongly in favour of a more ambitious EU carbon reduction target for 2030, in combination with a binding 2030 target for renewables,” he said.