Europe sets out plan to prop up flagging carbon scheme

The European Commission has issued a long-awaited proposal to withhold new carbon permits from entering the EU’s Emissions Trading Scheme (ETS), setting up a showdown with heavy-emitters like Poland that reject any efforts to shore up the flagging programme.

Although the proposals on the table are not strong enough to be of much assistance to renewables developers in the immediate term, the EC’s willingness to dramatically intervene in order to prop-up carbon prices could be of immense benefit over the coming decade.

The Commission will push for an amendment to the ETS legislation that would allow it to delay the introduction of some new carbon permits from 2013-2015 until 2018 – a maneuver known as “back loading”.

Such an amendment must be approved by the European Council and the European…

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