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EU ETS auctioning proposal likely to be delayed

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Opposition from the UK, Germany, Spain and Poland to European Commission proposals for a centralised system of auctioning carbon allowances in the EU ETSi from 2013-20 could mean that the proposal is delayed. A draft proposal was due to be sent to Member States for review at the end of 2009, but this will now not be submitted until 2010. Some Member States wish to maintain their own systems.

The delay could have implications for business. The vast majority of companies which responded to a Commission consultation stated that they will need early actions to help them estimate their costs in advance (see November 2009 Eurobrief). The electricity sector, for example, has warned that costs and therefore power prices could go up if the European Commission decides to implement spot auctioning for emission allowances from 2013 and not enough allowances are made available early enough. The power industry association Eurelectric has warned that European electricity customers could, as a result, face additional costs of up to €50 billion by 2012. The Commission is set to put forward a proposal on emission allowance auctioning by mid-2010.

The Commission’s presentation on the draft auctioning proposal can be found here:

http://ec.europa.eu/environment/climat/emission/pdf/28oct_draft_outline_reg.pdf

Directive 2009/29/EC on extending the EU ETS can be found here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:140:0063:0087:EN:PDF