Feb. 11 (Bloomberg) -- Sweden reaffirmed its support for a European Union proposal to tackle an oversupply of carbon- emission permits and called on European countries including Germany to clarify their positions on the plan.
Lena Ek, the Nordic country’s environment minister, reiterated Swedish support for political intervention to temporarily fix the glut “and prop up the too-low price which hinders the functioning of the entire system,” Erik Bratthall, a government spokesman, said today by phone from Stockholm.
The European Parliament’s environment committee is scheduled to vote on Feb. 19 on the first element of the so- called backloading plan, an amendment to the EU emissions- trading law. The draft measure, designed by the European Commission, the EU regulatory arm, also requires approval by the whole assembly and by national governments.
The number of available permits surpassed industrial and utility demand by about 1.6 billion at the end of last year, Kathrin Goretzki, an analyst at UniCredit Bank AG in Munich, said in a Jan. 29 report. That’s the most ever and equivalent to about 80 percent of a year’s supply, according to Bloomberg New Energy Finance.
Sweden is also analyzing options for a deeper overhaul of the EU emissions trading system, Bratthall said. The commission has outlined six potential scenarios for strengthening the program in the long term and is seeking opinions on them from governments, emitters, experts and non-governmental organizations.
The options include accelerating the pace of emission cuts, price support mechanisms and a permanent withdrawal of carbon permits from the market to reduce oversupply.
“We have no position on a possible permanent withdrawal of allowances,” Bratthall said.
--With assistance from Ewa Krukowska in Brussels. Editors: Rob Verdonck, John Buckley