EU lawmakers will not vote Tuesday on drafting CO2 law

Reuters News
Posted: Feb 25, 2013 2:48 PM
EU lawmakers will not vote Tuesday on drafting CO2 law

BRUSSELS (Reuters) - European politicians will not vote on Tuesday, as had been expected, on whether to begin drafting a law to prop up the EU Emissions Trading Scheme (ETS), delaying any possible deal on supporting the carbon market, an official agenda showed.

A European Parliament committee last week voted in favor of an emergency plan, known as backloading, to save the world's biggest market for carbon emission permits from collapse.

But politicians put off a decision for a week on drafting the necessary legislation to institute the hotly contested measure.

"Backloading will not feature in the committee hearing tomorrow. All other reports are inaccurate," Matthias Groote, chairman of the environment committee, who is leading the debate, said on Twitter.

A release of the agenda from the European Parliament later confirmed that no vote was foreseen "regarding a mandate on backloading".

In the absence of a vote on Tuesday, the normal procedure would be to resume debate at a plenary session of the European Parliament, either in March or in April, EU sources said.

Without an early agreement on drafting, the risk is that many more months of EU process will follow.

The carbon market, a pillar of the European Union's climate policy to cut greenhouse gas emissions, has hit a series of record low prices because of a huge surplus of allowances, mostly caused by economic recession in the euro zone.

Following the news that a vote would not he held on Tuesday, carbon prices fell nearly 12 percent to 4.57 euros per tonne by close of business.

The Commission's proposed plan entails temporarily removing some of the surplus, which has pushed prices far below the levels needed to make low carbon investment profitable and help curb planet-warming emissions.

It was meant to be a quick fix, which the Commission hoped could at least be agreed in principle by the end of last year as a first step towards deeper reforms.

Instead, indecision from EU member state Germany, opposition from Poland, which relies heavily on coal, and differences of opinion between business lobbies have mired the process in delay.

Representatives of member states will meet on Wednesday to discuss their positions, and on Friday the Commission will hold a first consultation meeting on structural reforms of the ETS.

(Reporting by Barbara Lewis and Claire Davenport in Brussels and Andrew Allan in London; editing by Jane Baird and Matthew Lewis)