EU Parliament vote on Emissions Trading Scheme intervention intended for Feb 28

The European Parliament has delayed the vote on a proposal to intervene in the EU ETSAn EU-wide ‘cap-and-trade’ system for reducing CO2, which commenced in January 2005. (Emissions TradingA market-based approach to achieving environmental objectives that allows sources reducing emissions below their target to sell the excess reductions to offset emissions at another source. Scheme). If successful, the vote will give the commission power to intervene in the carbon market, with the majority of members (of the cross-party environment committee) expected to be in support. The EU ETSAn EU-wide ‘cap-and-trade’ system for reducing CO2, which commenced in January 2005. intervention vote will now take place on February 28th, rather than on January 24th as initially thought.

The outcome of the vote could have a major influence on carbon prices, depending on how permits are released to the market. However, carbon market experts caution that to become law the vote is just one step in a long process. The vote has been pushed back due to a suspected 1,800 amendments in the efficiency laws. Before the changes are valid and legal, a full parliamentary ballot and agreements from the national EU governments must be passed.

At this stage, environmental groups and investors alike are applying pressure to call for interviews. A new law on energy efficiency could even reduce the demand for permits, which would further pressure prices.