EU may announce carbon link date this week
The European Union’s executive Commission may announce this week the date when it plans to link an EU market in carbon emissions permits with a similar UN-led scheme, a Commission source told Reuters on Wednesday.
“Possibly at some point this week, but not today, we’ll issue details of a precise date,” the source said.
The EU’s flagship scheme to combat climate change issues a fixed quota to heavy industry of permits to emit the main man made greenhouse gas carbon dioxide. Companies must either keep to that limit, or buy permits from other companies below their EU cap, or else they can fund emissions cuts in developing countries, earning offsets called CERs under a UN-run Kyoto Protocol scheme.
Until now there was no software link between the EU and UN schemes allowing CER delivery, a link originally expected nearly 18 months ago. That delay has made EU carbon market participants nervous as the first significant CER contract settlement date nears on December 1. “It (the date for a market link) has drifted and drifted,” said one carbon trader who declined to be named. If the link is still not up and running by December 1 then most contracts have a clause allowing settlement to roll over until the patch is complete, but confidence will be harmed at a time that many countries worldwide are considering introducing their own cap and trade schemes. “What you really can’t put a number on is the impact on sentiment,” the trader added.
Previously EU Commission sources have said that they would give three months notice ahead of a market link date. The European Commission will announce at 1200 Brussels time on Wednesday details of how a recent test of the link between the two markets had performed, the source added. (Reuters)
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