Commission postpones CO2 set aside consultation deadline
The Commission has postponed by two weeks the deadline for a public consultation on delaying carbon allowance auctions in a bid to boost prices.
Carbon market participants had hoped for a speedy finalised proposal from the Commission, after incomplete plans published in July led to a price slump as the market reacted negatively to continuing uncertainty over the proposal (see EDCM 25 July 2012).
The consultation period, which was due to end on 3 October, will now continue until 16 October.
"This was done to respect our consultation requirements," a Commission spokesman said on Friday afternoon.
Dirk Forrister, head of the International Emissions Trading Association (IETA), said it was still possible for the finalised proposals to be published by the end of the year. But he warned that any further delays to the finalisation of the auction delay plan would be problematic.
"A short delay coming out of the summer holidays is not totally unexpected. There's still adequate time, but this is not going to be able to tolerate many more delays," Forrister said.
"I don't think a two-week delay is likely to spook anyone. It would have spooked the market is this [delay] had happened just before the deadline. I just hope they don't do it again," he added.
Positive macroeconomic news in the EU and US, and expectations that registry functionality will improve late next month boosting liquidity, supported prices on Friday and forestalled a bearish reaction to the consultation delay news, market participants said (see market snapshot).
IETA intends to publish its reaction to the auction delay proposal by mid-September, Forrister said. VF
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