November 12, 2013 / 10:17 AM / 7 years ago

EU lawmakers to fast track bill to withdraw carbon permits

LONDON/BRUSSELS (Reuters) - European Union lawmakers will fast track a bill to cut the supply of carbon permits, an EU lawmaker and an official said on Tuesday, potentially enabling it to be adopted next month.

Lawmakers already fully agree on the backloading bill - a one-off intervention to delay the sale of 900 million carbon permits under the EU Emissions Trading Scheme (ETS) until later this decade, they said.

“There is informal agreement of no need for a trilogue,” said a spokeswoman for Lithuania, current chair of the EU Council of member states, referring to three-way negotiations between the European Council, Parliament and executive Commission.

The bill is intended to prop up carbon prices to a level that encourages companies to invest in low-carbon technology that cuts emissions of greenhouse gases.

Matthias Groote, lead member of the European Parliament on the issue, said the bill should be able to move straight to a final formal vote by the full assembly during its December 9-12 session.

“There is an agreement with the Council, and the signs from within the Parliament are good that we’ll sign it,” Groote told journalists in Brussels.

The Council of member states would also need to formally approve the bill, which could happen at a December 13 meeting of the 28-nation bloc’s environment ministers.

The agreement could end uncertainty over the bill following a year-long process that has caused wild swings in carbon prices, which in turn has affected power prices and the share values of utilities.

Rigid rules governing permit supply, combined with Europe’s recession, have resulted in a massive oversupply of the permits and pushed prices below 5 euros ($6.72) per ton from over 30 euros in 2008.

Even after the measure is passed into law, analysts at Thomson Reuters Point Carbon expect officials to take several months to craft the rules that are to withdraw permits from sale.

Point Carbon expects carbon prices to climb to 10 euros by 2016 as a result of the measure.

($1 = 0.7442 euros)

Reporting by Ben Garside in London, Barbara Lewis and Tom Koerkemeier in Brussels; editing by Jane Baird

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