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German opposition parties push for back-loading support

28 Jun 2013 17:35:29 | edcm

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German opposition parties are putting pressure on the government to support an EU proposal to back-load emissions allowance auctions in a bid to temporarily remove oversupply from the carbon market.

The applications from the social democrats (SPD) and coalition party Bundnis 90/Die Grunen come a week before a vote on back-loading in the European Parliament.

German Chancellor Angela Merkel supports such a move but has said that any action should be delayed until after the German elections this autumn (see EDCM 7 June 2013). The submissions by SPD and Bundnis 90/Die Grunen are designed to move Germany towards formal support for the measure before then.

Market participants polled by ICIS are increasingly confident that next week's plenary session of the European Parliament will pass the back-loading proposal in a vote on Wednesday, after the environment committee adopted a compromise text last week (see EDCM 19 June 2013).

Traders expect the proposal to have a limited price impact because the compromise version up for the vote is unlikely to dent oversupply in the market.

But formal support for back-loading from Germany could be a sign that the country would push for deeper supply cuts after its September elections.

The SPD and Merkel's Christian democratic union party, the CDU, have voiced support for raising the EU's carbon reduction target for 2020 to 30%, up from the current 20%. Marie-Louise du Bois

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