EU tries to stop C02 credits market crash
The European Commission has asked member states not to announce what they have polluted in 2005 until the deadline of 15 May, in an attempt to calm the bloc's greenhouse gas emission trading market, according to the Financial Times.
European carbon prices fell again on Tuesday after Swedish companies said they had ended up with ten percent more pollution allowances than they needed.
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Last week prices plummeted after four member states announced they had polluted less in 2005 than the ceiling set by the EU, leaving the market with more credits.
The announcements surprised many carbon emissions (CO2) investors who had been expecting EU members to pollute more than the allowed permits.
The markets should not be further distressed, the commission said in an email to national environmental authorities where it asked member states to wait with the emission announcements, FT Deutschland reports.
France, the Netherlands, the Czech Republic and the Walloon region of Belgium all announced on Thursday (27 April) a surplus of 2005 carbon credit allowed by the EU. Spain reported higher levels of emissions.
The price of emitting one tonne of CO2 has fallen around 63 percent since its peak two weeks ago. It fell to €11.50 on Tuesday after having dropped to €16.50 on Thursday from €23.40 on Wednesday and €30 on Monday.
2005 is the first year of the EU carbon emission trading scheme.
Experts say carbon dioxide announcements should be coordinated to avoid the publication of sensitive data and prevent fluctuating prices on the carbon trading market.
The EU climate exchange
The EU's carbon emissions trade market is where permits to pollute one tonne of carbon dioxide can be bought and sold.
The emissions trading scheme (ETS) was launched by the EU in January 2005 to fight climate change and meet its international Kyoto commitment to reduce emissions of global warming gases by 8 percent by 2012.
The exchange aims to put a ceiling on the total emissions by major industrial energy users and reduce the greenhouse gas emissions - widely blamed for climate change.
Companies polluting less than the targeted levels can sell and make profit from their unused permits while companies polluting above the targeted levels may buy permits.
However, countries expected to not have enough carbon credits - Britain, Germany, Spain, Italy and Portugal - have yet to report on their emissions.
An EU spokesperson said last week that it was too early to say how the market would be before all member states have announced their carbon emissions indicating that with all 25 results the emissions could be estimated much more accurately and the market might settle.
May 15 is the deadline for all member states to announce their emission levels.
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