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UPDATE 1-European People's Party will not oppose fast-track carbon market supply cut
February 3, 2014 / 3:33 PM / in 4 years

UPDATE 1-European People's Party will not oppose fast-track carbon market supply cut

(Adds analyst comment, prices, background)

LONDON, Feb 3 (Reuters) - The European People’s Party (EPP), the biggest grouping in the European Parliament, does not intend to oppose a fast-track plan to prop up carbon prices, an EPP official said on Monday.

EPP members in a cross-party industry committee met last week and decided not to object to shortening the scrutiny period of the so-called backloading plan to the parliament’s Conference of Committee Chairs (CoCC) on Tuesday, the official said.

A shorter scrutiny period would make it possible for the European Commission to withdraw 400 million carbon permits from sale this year, rather than the maximum of 300 million possible under the standard three-month scrutiny period.

European carbon prices rose nearly six percent to 5.92 euros after the news.

Analysts at Thomson Reuters Point Carbon said given the support among most other political groups, the EPP position makes it slightly more likely that 400 million permits would be withdrawn but said the outcome was still uncertain.

”(The EPP position) means the CoCC is likely to recommend a shortened scrutiny following tomorrow’s meeting, and that there will be an announcement at this week’s plenary - which would mark the start of the 24-hour deadline to raise objections, said Hege Fjellheim, an analyst at Thomson Reuters Point Carbon.

Once the recommendation is announced in the full plenary session of the 766-strong assembly, the shorter scrutiny period will be approved unless 40 MEPs or one political group raise an objection within 24 hours.

Members of the European Conservatives and Reformists (ECR) group oppose fast-tracking and will seek to block the measure, Konrad Szymanski, a Polish ECR member, told Bloomberg on Friday.

“I see it as very likely that there will be an objection - either by ECR or in any case it shouldn’t be too hard to mobilise 40 out of 766 MEPs - which would delay final clarity until Feb. 24-27,” Fjellheim said.

The ECR, the parliament’s fifth biggest group with 57 members, was not immediately available for comment.

An objection in plenary would force a vote among the full assembly, which, although likely to approve fast-tracking, could delay the process long enough to ensure the Commission runs out of time to withdraw the full 400 million permits this year.

Reporting by Ben Garside; Editing by Dale Hudson and David Evans

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