Members of the European Parliament (MEPs) defeated a proposal that was intended to stop falling prices of carbon in the carbon-emissions trading scheme through a reform known as backloading.
Backloading could have postponed auctions of an estimated 900 carbon permits by member states. Currently, such auctions are held regularly. Coal-fired power plants and other industries must buy carbon permits to emit carbon dioxide. The permits typically are issued for a period of 5-7 years.
MEPs voted 334-315, defeating the proposed reform that was suggested by the European Commission. The EU’s Council of Environmental Ministers said it would attempt to devise a different plan.
EU’s Emissions Trading System (ETS) was launched in 2008, and the current scheme runs to 2020. Analysts and others have warned that the ETS is faltering (OGJ, Feb. 25, 2013, p. 17).
Greenpeace called the vote an “historic failure” to mend the carbon trading market. Barring a way to curb an oversupply of permits, the ETS cannot “dissuade polluters and promote investments in cleaner production,” said Joris den Blanken, Greenpeace EU policy director.
Poland Environment Minister Marcin Korolec said, “It was a vote of reason.” Poland was among opponents of backloading, suggesting the proposal could slow economic development if implemented.
Finland MEP Eiga-Riitta Korhola, said, “In the present economic situation, the decision of backloading would be a wrong signal for households and industries alike. The burden of rising costs is not needed now.”