The European Parliament Rejects The Back-Loading Proposal

On 16 April, the European Parliament voted against the European Commission’s proposal, known as “back-loading”, aimed to reverse the falling price of carbon that has resulted from a surplus of permits in the ETS market. The vote was far from being unanimous: out of 712 Members of the European Parliament present, 334 supported the rejection the proposal, whereas 315 voted against the rejection and 63 abstained. The carbon market fell by the highest rate ever following the vote, to a record low price of 2.63 euro.

If successful, the reform would have resulted in the postponement of a series of auctions of carbon permits towards the end of phase 3, which runs until 2020. At the moment, auctions of permits take place on a regular basis, where companies have to bid for the allowances they need. However, as the market is already swamped, the price of carbon could fall even further.

The EC’s Back-loading proposal will go back to the European Parliament’s Environment Committee (ENVI) in spring 2013 for further consideration.


On this, EU Climate Commissioner Connie Hedegaard stated: “The Commission of course regrets that the European Parliament has not approved the back-loading proposal. The Commission remains convinced that back-loading would help restore confidence in the EU ETS in the short term until we decide on more structural measures. We will now reflect on the next steps to ensure that Europe has strong EU ETS.”

Environmental groups and energy companies reacted with alarm to the vote. “After this vote, the stability of the emissions trading scheme (ETS) is in serious doubt,” said Joris den Blanken of Greenpeace.

Hans ten Berge, secretary general of electricity industry association Eurelectric, said the vote, “is a dangerous set-back for the internal energy market and for EU carbon goals.”

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