The nine ministers have signed a letter urging all sides coming together in Brussels for Tuesday’s talks on a market stability reserve (MSR) for the EU carbon market “to seek an ambitious and pragmatic outcome”.
Davey said the committee must make clear the need for “strong and urgent reform” of the beleaguered market to show the rest of the world that “Europe is firmly committed to reducing emissions cost-effectively”.
Davey has joined calls for the backloaded supply of carbon allowances to be transferred to the MSR from 2017 rather than re-enter the already over-supplied market place.
The European Commission’s environment committee will vote on Tuesday afternoon on the details on the MSR reform currently proposed to come into effect from 2021.
A leaked document from the committee, which surfaced on Monday morning, shows a compromise on the set of amendments to the reform including a 2018 target start-date.
Although no formal agreement has been made the news that a consensus view is forming caused carbon prices on the market to rally. A UK carbon trader said the price of an emissions allowance rose from around €7.26 per metric tonne of carbon emitted to around €7.74/mt following the news.
Stronger carbon emissions prices are sorely needed following the post-recession collapse of the market, in order to provide investors in low carbon power options “the certainty needed to create investment, jobs and growth as we move to a low-carbon economy,” Davey said.
“Delay will only cause investor uncertainty, raise costs for businesses and ultimately leave consumers to pay the price,” he warned.