TheCompensators* » EU Commission: Oversupply of allowances in the European Emission Trading Scheme

EU Commission: Oversupply of allowances in the European Emission Trading Scheme

In a recent communication on the ETS, the EU Commission acknowledges that unforeseen developments lead to unfavourable consequences for the European cap and trade system for CO2.

The EU Commission proposes an approach of delaying the issuance of phase emission allowances without changing the absolute amount of emissions issued during phase 3. The effects of this approach are analyzed under a strong, a medium and a weak change of the auctioning profile. While this method is believed to be able to stabilize EUA prices during the first years of phase 3, this effect will vanish when the delayed issuance takes place.

In a recent press release on the ETS (in German), the German development bank KfW highlights that the delay of certificate issuance will not be able to solve the problem of oversupplies. Instead, an real and lasting reduction of emission allowances is necessary.

Until politics arrive there, you can contribute by donating here. TheCompensators* will use your donation to delete emission certificates and thereby contribute to the functioning of the ETS in a grass roots way.

 

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