EU countries back stronger price curbs on new carbon market

EU Nations Support Enhanced Price Controls in New Carbon Market

Strengthening the Carbon Market

By Kate Abnett

Proposed Changes and Delays

BRUSSELS, Feb 18 (Reuters) - European Union countries on Wednesday backed plans to strengthen price curbs in the bloc's upcoming carbon market, EU diplomats told Reuters, in response to concerns from some governments that the policy could raise fuel bills.

Political Opposition

The changes to the carbon trading scheme, known as ETS2, still need to be negotiated and approved by EU countries and the European Parliament. The Parliament is still finalising its position, after which the negotiations can begin.

Support from Other Governments

EU countries' ambassadors backed the price curb plans, which the European Commission proposed last year, in a closed-door meeting on Wednesday, the diplomats said.

DELAYED LAUNCH

ETS2 will impose a price on CO2 emissions from heating and transport fuels from 2028, and spend the collected revenues on helping households and businesses invest in electric cars and energy-saving renovations.

The scheme has faced mounting political pushback from governments including Slovakia and the Czech Republic, who warn ETS2 could lead to consumers paying more for energy and want the scheme further delayed. The EU already delayed its launch by one year, to 2028.

The changes backed by countries on Wednesday are designed to tame ETS2 prices by releasing more carbon permits into the market if the carbon price reaches 45 euros ($53.25) per metric ton  of CO2 - potentially adding up to 80 million permits to the market each year.

A group of five other governments, including Sweden and the Netherlands, on Tuesday opposed further delays to the system, which they said would undermine the EU's efforts on climate change and create uncertainty for investors. 

($1 = 0.8451 euros)

(Reporting by Kate Abnett, editing by Bart Meijer and Andrei Khalip)