(February 17, 2011) Multiple platforms for auctioning European Union carbon permits from 2013 could make the EU’s emissions market even more complex, drive up transaction costs and further dent security, analysts said.
“It makes the market even more fragmented. If Germany, Poland, UK and Spain all opt out, it’s a serious issue,” said Sanjeev Kumar, senior associate at environmental think tank E3G.
EU member states face a Saturday deadline to tell the Commission whether they will be participating in a centralised auctioning platform from 2013 or holding their own auctions under the EU’s Emissions Trading Scheme (EU ETS).
Two of Europe’s biggest emitters, Poland and Germany, confirmed they would prefer to operate auctions over national platforms. In the past, Britain and Spain have also said they want to control their own auctions.
“We are convinced that the stability of trade will profit when it is spread over different national platforms instead of a central one,” a German environment ministry spokesman said.
From 2013 to 2020, most carbon permits will be allocated via auctions instead of being distributed to emitters for free.
To facilitate this, the Commission proposed last year a single auction platform for all member states to use. After opposition, it backed down and said countries could choose to operate their own platforms if they wished.
Nina Chestney, Reuters, February 17, 2011
Categories: Carbon Credit Watch