Bloomberg News

EU Carbon Plan Sets ‘Dangerous’ Legal Precedent, Poland Says

September 19, 2012

The European Union plan to curb an oversupply of carbon permits sets a “dangerous” precedent and gives the bloc’s regulator excessive powers, Poland’s Environment Minister Marcin Korolec said.

A proposed amendment to the EU emissions trading law, the first element of the plan to delay some auctions of carbon permits proposed by the European Commission, may lead to a situation where the bloc’s regulator seeks similar intervention in other policy areas, Korolec said in an interview in Brussels.

“The legal quality of the amendment is problematic,” he said. “I think there will be more countries and members of the European Parliament who will have doubts about giving a blank check to the commission.”

At stake is curbing an oversupply in the EU emissions trading system, the world’s biggest, after carbon prices fell to a record low earlier this year on a glut that is equal to almost a half of the average annual pollution limit in the program.

The commission has repeatedly said the EU law gives it a mandate to propose the auctioning timeline when the bloc moves to more sales of permits as of 2013. The proposed law change reasserts the commission’s rights and is aimed at removing uncertainty about the supply curbs, it has said.

Member states will need more time to discuss the plan after two meetings of national climate advisers earlier this month didn’t bring a breakthrough and “many nations” don’t have official positions on the proposal yet, Korolec said.

Backloading Proposal

Envoys meet again today as the Climate Change Committee convenes in Brussels. The committee was scheduled to discuss the second element of the commission’s plan: a measure to delay a yet unspecified number of carbon permits at auctions as of 2013.

Poland finds the auction delay, also known as the backloading proposal, “unacceptable,” Korolec said.

“It would mean that the ETS is no longer a market mechanism,” he said. “It’ll be central planning.”

Both the draft amendment and the backloading regulation need qualified majority support from member states to pass. The change to the emissions law additionally needs approval in a vote by the European Parliament.

To contact the reporter on this story: Ewa Krukowska in Brussels at ekrukowska@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net


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