Work started on impact study for back-loading – Commission

The European Commission said it is already working on the impact assessment necessary for the implementation of back-loading.

Under an amendment passed by the European Parliament in July, back-loading can be implemented only after an assessment shows no significant impact on sectors particularly exposed to carbon leakage – the risk of losing business to countries with milder emissions legislation. The amendment also states the measure – meant to support carbon prices in the short term by delaying some of the scheduled auction supply – can be implemented only once in phase III of the EU emissions trading system (ETS).

“The impact assessment is being produced,” a spokesman for the European Commission’s Directorate-General for Climate Action said on Monday. A date has not been set for its completion. The assessment is being produced by the Commission and has not been outsourced – the usual procedure for such studies, the spokesman added.

Companies from over 150 European manufacturing sectors are currently considered at risk of relocating outside the bloc because of costs stemming from the EU ETS, and this status entitles them to receive a larger amount of free EUAs. The Commission is working on a new carbon leakage list for 2015-2019 to replace the current 2013-2014 one.

Back-loading can still become law before the end of the year, if the approval process proceeds smoothly. Last week EU countries gave the Lithuanian EU Presidency the mandate to start informal trilogue negotiations with the European Parliament and Commission. Any agreement from the talks has to be voted on by the European Parliament’s environment committee, and a plenary session of the EU’s elected house. The European Council also needs to back the deal.

At that point the Climate Change Committee would change the EU allowances auction calendar detailing when and which volumes will be withheld. This is when the assessment will likely be necessary. Silvia Molteni