Backloading of CO2 Emission Allowances (Decision)
Due to the economic crisis, the demand for and price of CO2 emission allowances are lower than originally expected. As a result, the Commission holds that the functionality of the EU emission trading system is jeopardised. Therefore, it wishes to be afforded the possibility to change the timetable for auctioning emission allowances in order to be able to temporarily hold back these allowances (“backloading“).
cepPolicyBrief
The possibility to change the auctioning timetable which is not connected to any concrete requirements, leads to planning uncertainty among market participants and thus impairs the functioning of the markets. Moreover, it contradicts the predictability requirement of the ETS Directive 2003/87/EC and infringes the principle of legal certainty based on the rule of law. Backloading could mark the beginning of a permanent reduction of allowances. This would also result in a politically induced uncertainty in the emission allowances market.
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