Back-loading profile vote scheduled for 8 January
The European Commission expects to remove at least 300m EU allowances (EUA) from its auctions in 2014 starting no later than June, it said as it announced that countries will vote on the back-loading profile in January. The figure could rise to 400m if the back-loaded auctions start before the end of March.
Back-loading is aimed at supporting carbon prices by delaying some of the scheduled carbon auction supply.
EU countries in the climate change committee will vote on timings of the 900m EUA sales on 8 January.
The commission will ask the committee to endorse a profile to back-load:
• 400m EUAs in 2014,
• 300m EUAs in 2015,
• 200m EUAs in 2016,
• and introduce the possibility to spread some of the 2014 volumes over the next two years, in case of a late start to the back-loaded auctions ( see EDCM 11 December 2013 ).
The commission will reintroduce 300m in 2019 auctions and 600m in 2020 on top of the annual auction volume.
The climate change committee already expressed support for this profile in it last meeting ( see EDCM 16 December 2013 ).
The commission said the 2014 back-loading volume will depend on the quarter in which back-loading starts:
• if it starts by the end of March, 400m EUAs will be withheld in 2014;
• for every quarter of delay, the 2014 volume will be reduced by 100m EUAs, and the quantity added in equal amounts to the 2015 and 2016 back-loading volume.
If back-loading starts later than March and before the end of June, 300m will be withheld in 2014 under this profile.
The commission said it does not expect back-loading to start later than June.
With total 2014 auction volume estimated at 943m EUAs, and auctions taking place in a business-as-usual volume until the measure starts:
• implementation by end of March would result in a 57% reduction of the auction volume scheduled for April-December;
• implementation by end of April would result in a 48% reduction of the auction volume scheduled for May-December;
• implementation by end of May would result in a 55% reduction of the auction volume scheduled for June-December.
The decision in the climate change committee requires a three-month scrutiny before the plan can start. Silvia Molteni
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