Germany's VCI criticises EU moves to 'fix' emissions trading

19 February 2013 15:42  [Source: ICIS news]

LONDON (ICIS)--The head of Germany’s chemical producers trade group VCI on Tuesday criticised a vote by a key European Parliament committee to curb available pollution allowances on the EU’s Emissions Trading System (ETS).

The parliament’s environment committee on Tuesday voted to back what it called an “emissions trading fix” that would delay the timing of pollution allowance auctions.

The measure is aimed at containing a growing surplus of allowances that is due to initial oversupply and the European economic slowdown. The surplus has seen prices for carbon dioxide (CO2) certificates fall well below levels expected when the ETS was created in 2005, the committee said.

“Creating the EU ETS was a landmark achievement but there is also a learning process,” said committee chairman Matthias Groote, who is a member of Germany's opposition Social Democratic Party.

“Delaying auctions is only a temporary fix, but it is a positive step”, Groote said.

“A stronger carbon price will help catalyse Europe’s transition towards a low-carbon economy”, he added.

However, VCI president Karl-Ludwig Kley said that parliamentarians were intervening in the ETS, thus damaging a market system that has been working well.

“There is no justification at all [for such an intervention],” Kley said.

Europe’s industry needs reliability and predictability. The current activism threatens the competitiveness of Europe’s industrial producers,” he added.

Kley called on Brussels and Berlin to protect the ETS against intervention.

Last week, Kley contributed an article to German business daily Handelsblatt in which he said that the current low prices for CO2 certificates on the ETS were the best evidence that climate change targets can be achieved with market instruments, and without harming the competitiveness of Europe’s industry.

The EU launched the ETS in 2005 as part of its policy to combat climate change and reduce industrial greenhouse gas emissions cost-effectively.

The ETS covers more than 11,000 power stations and industrial plants in 31 countries, as well as airlines. It is now in its third phase, running from 2013 to 2020.

By: Stefan Baumgarten
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