The 28 EU nations began talks last month on the plan to introduce a stability reserve mechanism for the $72 billion emissions trading system. The draft measure, designed to introduce automatic supply curbs or injections from 2021 to avoid imbalances, requires qualified-majority support from member states and majority backing from the European Parliament to be amended and take effect.
[...] Polish Votes
To be approved by member states, the draft law will need 260 out of 352 government votes in the EU weighted-ballot system, under which Germany has 29 votes and Poland 27. The measure was designed as a permanent mechanism to follow the EU emergency market fix known as backloading, which will withhold 900 million allowances at auctions between 2014 and 2016 and return them to the market in 2019-2020.
The EU should advance the stability reserve’s creation to 2017, the first year after backloading of permits ends, to better deal with a glut in supply, according to Martin Schoenberg, the head of policy at London-based Climate Change Capital, a unit of White Plains, New York-based Bunge Ltd. (BG)
“2017 would lead to smoother price development,” he said by phone from Brussels yesterday.