Countries keep options open ahead of carbon auction delay talks
Hungary has refused to confirm whether it supports a delay to carbon allowance auctions to boost prices ahead of a key meeting on Wednesday, September 19.
And Slovakia has indicated that, while it is in favour of auction delay in principle, in practice it does not know which of the options set out by the European Commission it prefers - 400m, 900m or 1.2bn allowances being delayed or "back-loaded" (see EDCM 25 July 2012).
Slovakia is still considering the "scenario" of no back-loading taking place, a government spokesman said.
Carbon market participants are anxiously awaiting the results of Tuesday's EU climate change committee meeting, which was convened to discuss the Commission's proposals. A public consultation on the matter is in progress (see EDCM 31 August 2012).
"I don't think anything firm will come out of the meeting," analyst Matthew Gray at broker Jefferies Bache predicted.
"My feeling is that they won't say anything concrete until the consultation ends on 16 October."
He added that a timetable for decision-making on the matter could be the main result of Wednesday's talks.
Meanwhile, EU carbon prices ticked up on Tuesday afternoon after dropping for four consecutive sessions.
"I think lots of market participants have decided to stay on the sidelines before tomorrow's meeting," one trader said.
Supporters of the auction delay proposal are worried that it could fail to find support because it would lead to higher energy prices, affecting industry at a time when many European countries are struggling economically.
Slovakia is "generally in favour [of the] Commission proposal to set aside part of the auctioned emission allowances in order to increase its price", a spokesman said. "However, we are still analysing the impacts on price and revenues, total allowances and industry for three difference scenarios - 1.2bn, 900m and 400m."
A spokeswoman for Hungary's deputy state secretary for green economy development and climate change policy declined to state whether her country supports or opposes the Commission's proposal because of continuing negotiations.
The Dutch government has indicated that it is against the proposal. The same Dutch government that was against the auction delay proposal is still in power after a parliamentary election last week (see EDCM 12 September 2012). VF
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