Tag Archives: european
Carbon Voting Gets Dirty
4:38 am Jul 3, 2013 Carbon Voting Gets Dirty These signs were hanging from parliament members’ door handles in Strasbourg. They were put there by the International Paper Co., which said it agreed with the climate-change fighting scheme, but not the proposed fix intended to raise carbon emission prices. Courtesy of International Paper Co. European Parliament was gearing up to vote Wednesday on whether to rejuvenate, or let lie fallow, its flagship climate-change fighting policy, the Emissions Trading System. Shortly beforehand, the outcome remained too close to call with any definitive certainty. Again. The legislation is a compromise on what parliament very narrowly shot down in April. For those members of parliament having difficulties making the decision this time around, there was no shortage of opinions being pushed. MEPs, by all accounts all 766 of them, showed up to the office Monday with a hotel-style sign hanging from their office door handles by International Paper Co. IP -0.16% “Do as you are told!” said the tear-drop sign featuring a full mug shot of Connie Hedegaard, European commissioner for climate action. “The Climate Action Commissioner refused to accept your democratic decision and is now telling you to compromise your principles,” it said. “The choice is clear. Vote NO again to preserve your political credibility.” The effort was condemned by Matthias Groote, MEP in the Social Democratic party who heads the parliament’s environment committee. “I’m okay with lobbying,” Mr. Groote said. “Everybody has a right to share their opinions. It’s part of the democratic process.” “But this is not fair. We work very hard. To simplify it like this is a lie,” Mr. Groote said. An International Paper spokesman said the company supports the ETS scheme, just not the proposed fix. The proposal, known as backloading, is intended to lift the cost of emitting carbon-dioxide, which collapsed alongside the drop in demand for electricity during the economic downturn. The lack of industrial activity resulted in too many carbon permits in the market. The new rules would temporarily reduce this oversupply. The higher prices anticipated from this could help reintroduce incentives for cutting the use of fossil fuels and developing renewable technologies. But the fix is technical and not easy to understand. Analysts have said it probably won’t raise carbon prices enough to have an impact. Yet without this attempt at reform, the EU’s carbon market will almost certainly fall into obscurity, while California, Australia, and even China race ahead with their own carbon markets. So just how close will this vote be? About as close as the last one. In April parliament voted 334 to 315, with 63 abstentions. This was so close for a parliamentary vote that the a whole host of variables could have shifted it, including nothing to due with climate or industry at all, said Jerzy Buzek, EPP member and former prime minister of Poland, who is against backloading. The vote in April “was just one day before the funeral of Margaret Thatcher,” Mr. Buzek said, adding that if it had been “on the day of the funeral, backloading would have been approved. All the conservatives would have gone to London, and the result would have been quite opposite.” With no major state funerals scheduled for Wednesday, expect this to go to the wire. Continue reading
Carbon Market Glut-Fix Plan Wins Backing in EU Parliament
By Ewa Krukowska – Jul 3, 2013 European Parliament approved a plan intended to reduce a record glut of permits and increase prices in the world’s biggest carbon market after they slumped to an all-time low. European Union carbon allowances rose the most in two months after lawmakers in Strasbourg, France , endorsed a revised version of a plan known as backloading advanced by the European Commission, the region’s regulatory arm. That was the parliament’s second verdict on the measure, which would delay the sale of some permits to support prices after it blocked the plan in April, triggering a 45 percent slump in permits. Enlarge image European Union carbon allowances rose as much as 9.8 percent after lawmakers in Strasbourg, France today endorsed a watered-down version of a plan known as backloading and advanced by the European Commission. Photographer: Fred Tanneau/AFP via Getty Images “It’s a good signal that parliament voted this through today,” Oeystein Loeseth, chief executive officer of Vattenfall AB, Europe’s biggest emitter after RWE AG (RWE) , said by telephone. “When you take volumes out of the market, prices will increase.” Emissions prices in the $72 billion cap-and-trade program have lost more than 70 percent in the past four years. The euro area’s record-long recession reduced demand for pollution rights and worsened a glut that swelled to about 2 billion tons in 2012, according to the EU. That’s almost equal to the region’s annual limit imposed on 12,000 power plants and factories. The caps were set before the financial crisis. EU allowances for delivery in December gained as much as 12 percent, the biggest jump since May 3, to 4.79 euros a metric ton on the ICE Futures Europe exchange and were at 4.76 euros at 2 p.m. in London . The contract slumped to a record 2.46 euros on April 17, the day after the parliament blocked the emergency fix in its first plenary vote. ‘Largest Hurdle’ Lawmakers endorsed the plan 344 to 311, with 46 abstentions, according to the voting result. “The backloading plan has passed its largest hurdle so far, but auction curbs are still far from certain and unlikely to start before mid-2014,” Itamar Orlandi, an analyst at Bloomberg New Energy Finance in London said today by e-mail. “The focus will now shift from Strasbourg to Berlin, as Germany ’s decision on the plan will determine whether it can go ahead.” Traders will now focus on positions of national governments, whose consent is also needed to enact the plan, according to Ingo Ramming, co-head of commodity solutions at Commerzbank AG in London. “Markets are hoping on a fast-track decision to regain confidence in the EU emissions trading scheme,” he said today by e-mail. “We would expect that prices are capped in the mid-term around 6 euros on the back of uncertainties on the European economy, supply from industrials and auctioning.” Rejected Amendments Permits may rise to 5.20 euros after the approval, according to the median forecast of nine analysts and traders surveyed by Bloomberg News before the vote. The assembly rejected amendments seeking an earlier return of the delayed permits to the market and earmarking 600 million allowances for a special fund to promote low-emissions technology. It backed a proposal to cap backloading at 900 million permits and limit the planned intervention in the carbon market to an exceptional, one-time move. The delay in sales of permits may be enacted under the condition that it has “no significant impact” on companies prone to relocating production to regions without emission curbs, lawmakers decided. “This is more bullish than the market had anticipated,” Konrad Hanschmidt, an analyst at BNEF, said today by e-mail. Energy Costs The backloading strategy has divided policy makers and industry. Opponents of the fix, ranging from Poland to steelmaker ArcelorMittal (MT) , say it pushes up energy costs during an economic slump. The EU commission and companies including Royal Dutch Shell Plc (RDSA) say intervention is needed to bolster prices that are too low to stimulate investment in clean technology. “Yes!” EU Climate Commissioner Connie Hedegaard said on her Twitter Inc. account. “Despite heavy-handed lobbying, and after very substantial debate, the European Parliament supports the backloading proposal.” The decision in favor of backloading today authorizes Matthias Groote, the lawmaker overseeing the measure in the Parliament, to start talks with representatives of national governments on the final wording of the legislation in a fast-track procedure. The outcome of the talks will need official approval by the parliament and EU ministers. Lithuania, which holds the EU rotating presidency and will represent member states in the negotiations, is ready for a “constructive dialog” on the carbon fix, the Baltic country’s Environment Minister Valentinas Mazuronis said in an emailed statement. He said he was confident the measure can be dealt with “effectively and expeditiously.” German Elections The Parliament’s decision to block the faster return of permits to the market and the creation of the innovation fund will make talks with member states easier, Peter Liese, a German Christian Democrat member of the Parliament, said after the vote. “It’ll go very fast after the German elections,” he said in an interview. Member states may decide about their position by “early fall,” according to Arunas Vinciunas, Lithuania’s Deputy Permanent Representative to the EU. While most EU countries favor backloading, they are short of the qualified majority needed to approve the proposal because several nations, including Germany, remain undecided. Chancellor Angela Merkel said in May she hoped Europe’s biggest economy would be able to tackle the plan soon after elections on Sept. 22. To contact the reporter on this story: Ewa Krukowska in Brussels at ekrukowska@bloomberg.net To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net Continue reading
Will EU Backloading Vote Rescue The Carbon Market?
MEP Matthias Groote predicts reworked carbon market proposals will be approved by MEPs in Strasbourg today By Jessica Shankleman, in Strasbourg 03 Jul 2013 The European Parliament is poised to back reforms to the carbon market today, that could push up the price of carbon and drive billions of euros of investment in industrial energy efficiency measures through to 2020. At least that is the view of Matthias Groote, the German MEP responsible for the “backloading” proposals that would temporarily withhold 900 million carbon allowances from the EU Emissions Trading System (ETS), in a bid to tackle the glut of carbon credits in the market that has pushed the price of carbon to record lows. Speaking to BusinessGreen ahead of the vote in Strasbourg, Groote, who is chairman of the Parliament’s environment committee, said he was optimistic MEPs will back the measure today, even though a similar proposal was narrowly rejected by 334 votes to 315 back in April . Groote insists the reworked proposals offer a better deal for energy intensive businesses as it would provide new funds for them to invest in energy saving technology before the end of this decade. “We have another approach in this proposal and we have another majority and it’s more innovative,” he said. Under the new plans, 600 million of the withheld CO2 allowances would be channelled through the European Commission and European Investment Bank’s (EIB) NER300 fund, which provides financial support to renewable energy and low carbon projects. However, the additional funding forms part of a compromise between three of the main political parties, which some environmentalists fear will water down the backloading plans to the point that they will fail to drive new investment. Speaking to reporters yesterday, Rebecca Harms MEP, co-chair of the Greens and European Free Alliance Party, questioned the effectiveness of the backloading proposals in the long term, arguing that they merely mask weaknesses in the system. “Backloading 900 million allowances is not going to help the trading system operate properly and help to reduce pollution,” she said. “We have got all these [surplus] certificates on the market… and our ambition is too weak. We need to raise the objective and keep ensuring we have the right price for CO2 so we can stimulate investment.” But some of the Greens also appear to have accepted that backloading will be a crucial first step towards delivering longer term reforms to the market. The group is now calling for the Commission to permanently retire at least 1.4 billion of allowances to address the oversupply issue. The Commission is due to publish its proposals for structural reforms later this year. Many businesses are also keen to see the backloading proposals approved. Earlier this week, 42 companies and trade associations backed a letter from 12 European energy and environment ministers, calling for the latest backloading proposals to be approved. However, other firms and trade associations, including Europe’s biggest business lobby group BusinessEurope, remain opposed to the measure amid fears it could push up the cost of energy. If backloading is approved, it has also warned against the permanent withdrawal of allowances, arguing that such a move would represent unacceptable interference in the market. Groote remains optimistic there is sufficient support in the parliament to pass the backloading plan at the second time of asking and is equally confident the European Council of member states will support the move if it is passed in Strasbourg. But he admitted that if backloading is rejected the current attempt to drive up the price of carbon would be “dead”, and serious questions would be raised about the Parliament’s ability to deliver wider ranging reforms to the EU ETS later this year. “It’s not clear,” he said, when asked what would happen if the backloading plan is rejected. “I don’t know what would happen. But… it will not happen. At least I hope not.” Continue reading
