LONDON, March 17 (Reuters) - The benchmark EU carbon contract fell 5% on Tuesday morning after the European Commission president said late on Monday that the bloc could make more carbon emissions
European carbon prices slide as EU considers intervening in market
EU Considers Measures to Address Carbon Market and Energy Prices
By Kate Abnett and Susanna Twidale
BRUSSELS/LONDON, March 17 (Reuters) - Europe's carbon price fell by more than 5% on Tuesday after the European Commission President said the bloc would consider making more carbon emissions permits available to help curb high energy prices.
Proposals to modify the European Union's carbon market have become central to the bloc's attempt to contain rising energy prices, triggered by the U.S.-Israeli war on Iran that began last month.
Commission President's Proposals
In a letter to EU leaders ahead of a Thursday summit in Brussels, Ursula von der Leyen said the EU was preparing measures to tackle high energy prices, including adjustments to a reserve regulating the supply of emission permits in the EU carbon market, to help "keep prices in check in the short term".
Adjustments to Permit Supply
The EU will also moderate its plans to curb the amount of free CO2 permits the EU gives to industries, and use a review of the system planned for July to revise plans to tighten supply in the market after 2030, she said.
Market Reaction
The benchmark EU carbon contract was down 3.8% at 66.33 euros a metric ton on Tuesday afternoon, having earlier touched 64.93 euros/ton its lowest level since April 2025.
Countries at Odds Over Intervention
COUNTRIES AT ODDS
Countries are split over intervening in the emissions trading system, the EU's most important climate change policy. Launched in 2005, the ETS forces power plants and industries to buy permits to cover their CO2 emissions.
Debate Among EU Climate Ministers
At a meeting in Brussels on Tuesday, some EU countries' climate ministers said they were awaiting more detailed proposals to understand if the EU proposals would weaken the system.
Concerns Over Climate Targets
"It really depends on the speed or magnitude with which she would want to adapt this," Dutch climate minister Stientje van Veldhoven-van der Meer told Reuters, of von der Leyen's plan to revise the reduction of ETS permits after 2030.
"If you radically adapt it, it could have larger consequences for whether you achieve the [climate] targets."
Germany's Position
German environment minister Carsten Schneider said Europe's biggest economy would back only "slight adjustments" that did not blunt the ETS's investment signal to companies.
Italy and Hungary's Demands
Italy and Hungary, meanwhile, want the system suspended for gas power plants, to prevent the carbon price feeding into electricity bills.
Impact on Energy Bills
On average, the ETS comprises 11% of energy bills in Europe, but this exceeds 20% in countries with more polluting energy mixes.
Hungary's state secretary for environment Aniko Raisz said Budapest was demanding "something that has a real result on the market prices and not just something like a surgical stitch."
(Reporting by Kate Abnett in Brussels and Susanna Twidale in London;Editing by David Goodman and Emelia Sithole-Matarise)
