By Kate Abnett BRUSSELS, Feb 17 (Reuters) - Sweden, Denmark, Finland and Luxembourg have opposed calls by other European governments to delay the EU's upcoming carbon market, as political pressure
Sweden and Allies Reject Proposals to Postpone EU Carbon Market Launch
Opposition to Delay of EU Carbon Market
By Kate Abnett
Political Pressure and Responses
BRUSSELS, Feb 17 (Reuters) - Sweden, Denmark, Finland and Luxembourg have opposed calls by other European governments to delay the EU's upcoming carbon market, as political pressure mounts for the bloc to curb energy costs, a joint paper by the countries showed.
Impact on Investment Decisions
The paper concerns the European Union's upcoming second carbon market, known as "ETS2", which from 2028 will impose a price on CO2 emissions produced by heating and transport fuels.
Future of ETS2 and Existing Markets
The EU has already delayed the market's launch by one year, and fast-tracked the distribution of revenues to governments from the scheme. But that has not quelled pushback from leaders in Slovakia and the Czech Republic, who say it will raise fuel bills.
AMBASSADORS TO DISCUSS STRONGER PRICE CONTROLS
"Any further postponement or amendments related to the market-based price of ETS2 would substantially undermine the effectiveness of EU climate policy," Sweden and the other countries said in the paper circulated among EU governments and seen by Reuters.
EU countries' ambassadors meet on Wednesday to sign off on stronger controls on ETS2 prices, which Brussels proposed after 19 countries demanded this last year. The four countries' paper said that once these changes are passed, the EU should leave the system alone.
Debates about changing ETS2 further "are reducing the system's credibility and increase uncertainty for investment decisions by firms and households," they said.
ETS2 is designed to encourage the shift to electric vehicles and cleaner home heating systems, by putting a price on CO2 emissions, and recycling the revenues from the scheme to subsidise electric cars and energy-saving home renovations for poorer households and smaller businesses.
Brussels has also faced mounting pressure from some governments and industries to weaken its existing carbon market, which puts a price on CO2 emissions from industries and power plants.
The European Commission will propose a review of the existing carbon market later this year. Some governments are eyeing that as a route to also change ETS2, since it is governed by the same law, EU diplomats said.
(Reporting by Kate Abnett; Editing by David Holmes)
