Jan. 20 (Bloomberg) -- The European Parliament’s industry committee will vote Jan. 23 on a resolution objecting to an emergency plan to buoy carbon prices, according to two people familiar with the matter.
The vote is one day before the deadline for the industry panel to submit its opinion to the Parliament’s environment committee, said the people, who asked not to be identified, citing policy. The environment panel leads work on the scrutiny of the carbon plan in Parliament after the measure was approved by representatives of member states on Jan. 8.
The European Commission’s rescue plan will delay the sale of 900 million permits in 2014-16 and return them to the market at the end of the decade. The plan, known as backloading, is intended to lift carbon prices from levels the commission said are too low to spur investment in renewable energy.
“Some die-hard opponents of backloading may still try to throw obstacles at the plan, but this will not stop auction curbs,” said Itamar Orlandi, an analyst for Bloomberg New Energy Finance. The opposition “however, reduces the probability that auction curbs will start before April.”
The objection, put forward by a group led by Paul Ruebig, an Austrian member of the European People’s Party, comes after the commission called for the usual three-month scrutiny period of its carbon-market plan be shortened.
Industry committee support for the objection would mean that Parliament’s environment panel will need to vote on it in the next step, said the people. Objections to the carbon-market rescue plan can be raised on the grounds that it exceeds the implementing powers of the commission, according to the EU law.
The environment committee is unlikely to back the proposed objection and its chairman Matthias Groote will probably ask heads of other committees to accelerate the scrutiny, the people said. Still, if the resolution gets backing from the industry panel, its head could block Groote’s recommendation in the next stage of the procedure, they said.
If the objection fails in the industry committee, the Parliament may end the scrutiny as soon as the first week of February at its next plenary meeting, the people said. The start of backloading before the end of March means the EU will postpone 400 million permits this year. If the evaluation isn’t accelerated and backloading begins in the second quarter, 300 million allowances would be delayed.
EU carbon permits for delivery in December fell as much as 4.5 percent, the biggest drop since Dec. 11, on the ICE Futures Europe exchange today. The contracts closed down 2.5 percent at 5 euros a ton in London.
--Editors: Andrew Reierson, Rob Verdonck