The European Parliament’s Environment Committee today voted to support a proposal to amend the auctioning timetable of the EU ETS, known as ‘back-loading’. The ‘backloading’ of 900 million allowances is intended to temper the oversupply of allowances at a time when supply vastly outweighs demand, as well as providing the market with reassurance that the EU ETS is here to stay.
Sandbag welcomes the decision to support the proposal but emphasises that the back-loading measure offers only a temporary reprieve for the beleaguered scheme. Without more meaningful structural reforms the EU ETS is likely to continue to under perform.
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.”_
In new reports published by Sandbag and NGO Partners in [Germany ]( “”)and [Greece ]( “”)last week found that, at national level, prominent firms such as ArcelorMittal, Salzgitter, Lafarge and Titan Cement face no exposure to any rise in the carbon price out to 2020 or beyond, owing to the extensive protections afforded them by free carbon allowances and access to international offset credits. Meanwhile data from the European Environment Agency shows that, over 2008-2011, the manufacturing sectors in the EU ETS were awarded 31% allowances more than were needed to cover their emissions, amounting to 675 million spare allowances.