(Adds carbon prices from second paragraph.)
Oct. 25 (Bloomberg) -- European Union nations are due to decide in two weeks whether to allow the start of talks on a draft carbon-market fix with the region’s Parliament, according to an EU presidency official.
Lithuania, which holds the rotating presidency of the 28- nation bloc, plans to seek approval for a negotiating mandate at a meeting of ambassadors from member states on Nov. 8 in Brussels, said the official, who asked not to be identified, citing policy. EU carbon permits jumped as much as 8.6 percent on speculation that work will accelerate on the rescue plan, which aims to help emission prices recover from record lows by temporarily curbing supply of allowances at auctions.
The presidency, which will conduct talks with the European Parliament on behalf of member states, plans to propose nations accept the draft measure as amended by the assembly in July, according to the official. That would enable fast conclusion of the negotiations, in which the parliamentary team will be lead by Matthias Groote, the chairman of the environment committee.
“A green light for the talks on Nov. 8 is likely to make auction curbs significantly more certain and raise the prospects of implementation earlier than many had anticipated,” said Itamar Orlandi, analyst at Bloomberg New Energy Finance in London. “Delays of carbon auctions could start as early as in June 2014.”
EU allowances for December were trading 6.9 percent higher at 4.99 euros ($6.88) a metric ton as of 3:29 p.m. in London after earlier reaching a high of 5.07 euros the ICE Futures Europe exchange. They slumped to a record 2.46 euros in April on concerns that policy makers may fail to approve the rescue plan, proposed to alleviate a record surplus in the 53 billion-euro cap-and-trade carbon program.
To get the mandate, Lithuania will need 260 out of 352 government votes in the EU weighted-ballot system, which favors bigger countries. The presidency’s previous attempt at winning the authorization to start talks with the Parliament failed on Sept. 11, when countries including Poland and Cyprus objected and nations such as Germany and Spain remained undecided. Abstentions are counted as votes against in the EU system.
If supporters of the measure are short of a qualified majority, the presidency may decide to postpone the vote.
German Chancellor Angela Merkel came out in favor of the carbon fix, known as backloading, in her first post-election speech on Oct. 16. Her comments that a “certain degree” of backloading is needed to restore carbon prices to a sensible level were a “very strong” signal, Groote, a German lawmaker from the Socialists and Democrats group in the EU assembly, said in an interview the following day. Merkel’s party is in talks to form a coalition with the Social Democrats, the main opposition party in the previous parliament.
“The scheduled Nov. 8 date for a mandate decision implies that Germany’s interim government will support the backloading decision, without waiting for coalition talks in Berlin to conclude,” Orlandi said. “It is however likely that the next coalition will support backloading.”
Should the mandate get approval from member states, talks with the EU Parliament can be as quick as several minutes, Groote said last week. Their outcome will need to be backed by the assembly and by ministers before the backloading measure becomes a law.
That would mark the first stage of the legislative process to curb the supply of emission allowances. In the next stage representatives of member states will need to vote on the details of backloading, including the exact timing and volume, in a process known as comitology. Their decision will be subject to a three-month scrutiny by ministers and by the European Parliament, which won’t need to hold a vote on the measure.
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--Editors: Jones Hayden, Andrew Reierson