Feb. 25 (Bloomberg) -- The European Parliament won’t opt for fast-track negotiations with member states on a carbon- market fix and will instead discuss it at a plenary session in April, according to lawmaker Matthias Groote.
Groote, a German member of the Parliament, oversees a draft law change that would enable reducing oversupply of permits in the world’s largest cap-and-trade market. Carbon allowances sank as much as 12.7 percent to 4.53 euros a metric ton on the ICE Futures Europe exchange after his announcement that the next steps on the proposal will be decided by the whole assembly rather than the environment committee.
The EU carbon-market rescue plan assumes delaying auctions of 900 million permits from 2013-2015 to 2019-2020 to temporarily reduce a record glut aggravated by the economic crisis. The strategy, designed by the European Commission and known as backloading, also needs approval from member states.
“We will vote in plenary,” Groote said in a text message. “I’ll stick to the timetable and we will get backloading.”
His decision follows calls by the European People’s Party, the biggest group in the EU Parliament, that the draft measure be considered by the whole assembly due to its complexity. The proposal, aimed at helping carbon prices rebound from a all-time low, has divided governments, members of the Parliament and industry.
“It is such an important issue that the whole house should decide about that,” Eija-Riitta Korhola, EPP’s lead lawmaker on the measure, said in a phone interview today.
Korhola, who is a Finnish member of the EU Parliament, said majority of EPP members oppose the carbon fix because it undermines predictability for investors and leads to higher energy prices, threatening the competitiveness of European businesses.
The Parliament’s industry committee recommended rejecting the commission’s proposal last month. The panel has an advisory role in the legislative process.
The environment committee last week supported the rescue plan in a non-binding opinion that serves as a recommendation to the whole parliament. EPP was split on that issue, according to the voting results.