Today’s vote in the European Parliament in favour of ‘backloading’ is an important boost for low carbon investors, says Martin Pibworth, SSE’s Managing Director, Energy Portfolio Management.
The price of carbon allowances in the EU emissions trading scheme should reach its highest level in several years, after the European Parliament finalised its plan to tackle oversupply in the market by delaying the auction of 900 million carbon credits.
Martin Pibworth, SSE’s Managing Director, Energy Portfolio Management, said the vote would drive forward the decarbonisation of the European economy.
He said: “Today's vote for the backloading of 900 million EU ETS [European Union Emissions Trading Scheme] allowances from the European Parliament is an important and positive first step towards providing a robust carbon price signal for low carbon investors.
“The clear majority in the Parliamentary vote should give the European Commission impetus to bring forward real structural reform of the EU ETS. SSE and others are calling for reforms to link the supply of EU ETS allowances to demand through a Supply Adjustment Mechanism.
“This will fix an underlying flaw with the EU ETS and will prevent a build-up of surplus allowances in the future. Removing this inherent volatility will give investors greater confidence in the EU ETS as the principal driver for the transition to a low carbon economy.
“We welcome today's decision and hope further reform will follow swiftly to facilitate cost efficient decarbonisation of the European economy."