Bloomberg News

EU Parliament’s Biggest Group Wants Plenary Talks on Carbon Fix

February 25, 2013

EU Parliament Member Eija-Riitta Korhola

European Union Parliament Member Eija-Riitta Korhola said a majority of EPP members oppose the carbon fix because it undermines predictability for investors and leads to higher energy prices, threatening the competitiveness of European businesses. Photographer: Gerard Cerles/AFP via Getty Images

The biggest group in the European Parliament wants the whole assembly to decide about talks with governments on a carbon fix, avoiding fast-track negotiations, lawmaker Eija-Riitta Korhola said.

The EU Parliament’s environment committee is considering a change to the bloc’s emissions trading law that would enable temporary curbs on oversupply of carbon permits. Korhola, who is the European People’s Party lead lawmaker on the draft measure, said the proposal’s complexity requires a plenary rather than a committee authorization on further legislative steps.

“It is such an important issue that the whole house should decide about that,” Korhola said in a telephone interview today. Her political group, known as the EPP, expects a vote in the environment committee tomorrow on whether to pursue accelerated talks with member states or seek the opinion of the full assembly before starting the negotiations, she said.

EU carbon allowancesdropped to an all-time low of 2.81 euros a metric ton last month as the economic crisis curbed demand for pollution rights, leading to a record oversupply in the world’s biggest cap-and-trade market. The EU proposal to temporarily reduce the glut by delaying auctions of some permits in 2013-2015 has divided governments, members of the European Parliament and industry.

Korhola, who is a Finnish member of the EU Parliament, said a majority of EPP members oppose the carbon fix because it undermines predictability for investors and leads to higher energy prices, threatening the competitiveness of European businesses. The rescue plan for the emissions market, designed by the European Commission, is known as backloading because the 900 million permits to be delayed at auctions would be returned to the market in 2019-2020.

Market Mechanism

“It wouldn’t be wise to intervene in a market mechanism,” Korhola said.

The Parliament’s industry committee, known as ITRE, recommended rejecting the commission’s proposal last month. The panel has an advisory role in the legislative process.

The environment committee last week supported the rescue plan in a non-binding opinion that serves as a recommendation to the whole parliament. EPP was split on that issue, according to the voting results. In a separate vote the panel decide to delay by a week a decision on whether to follow a fast-track approval of the measure, which also requires qualified-majority backing from EU governments.

Matthias Groote, the chairman of the Parliament’s environment committee who oversees the law change in the assembly, hasn’t announced yet whether he would call a vote on the mandate to start accelerated talks with member states tomorrow, Korhola said. Majority of EPP members will vote against such authorization without a prior plenary discussion, she said.

“It would be utterly undemocratic after the ITRE vote to let the environment committee only decide about the procedure,” Korhola said.

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

To contact the editor responsible for this story: Jones Hayden at jhayden1@bloomberg.net


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