|Will the second carbon leakage list be used to intervene in the market?|
|Monday, 24 June 2013 21:08|
There are doubts regarding the necessity to verify carbon leakage list merely two years after its adoption. It seems that this period is too short to assess whether there are serious threats to the competitiveness of branches covered by the actual list. Moreover, the current level of carbon prices makes all assessments strictly hypothetical and vulnerable to change. Nevertheless, given legal obligation imposed, the verification is inevitable. The significant report likely to influence future decisions on the issue is now available.
Final report 'Support to the Commission for the determination of the list of sectors and subsectors deemed to be exposed to a significant risk of carbon leakage for the years 2015-2019 (EU Emission Trading System)' dated January 2013 accompanies public consultation launched by the European Commission (public consultation website see here).
Among questions involved is whether the said process will be used to intervene in the carbon market to influence carbon prices. Deep cuts regarding the scope of branches covered by the actual list would mean simultaneous cuts in the overall cap on free allowances available on the market. It is to be seen whether the European Commission decides to engage in this way.
Background on State Aid rules regarding carbon leakage.
For more information see also 'Second carbon leakage list – basic legal environment for the issue'.