Europe’s largest employers’ group has warned against meddling in the carbon market to prop up sagging prices, just a day after one of the continent’s top energy executives declared the market “dead” and demanded urgent intervention to save it.
In a letter to parliament released on Wednesday, Philippe de Buck, president of BusinessEurope, warned that moves to withdraw carbon permits from the market to bolster prices “would, if implemented, create further uncertainty and price volatility, and establish a risky precedent of rapid political interference in the market”.
Mr De Buck, whose constituents have struggled to forge a common position on the issue, said he wanted “an open discussion ... about the general climate policy framework and the longer term future” of the carbon market.
In December, the European parliament’s environment committee approved a resolution calling for the removal of more than 1bn surplus carbon permits from the market in an effort to shore up prices. The industry committee will vote on a similar measure at the end of this month.
Other elements of corporate Europe, particularly heavy industry, argue that such meddling would make a mockery of the market.
Johannes Teyssen, chief executive of Germany’s EON, urged policymakers to make fixes. “Let’s talk real: the ETS is bust, it’s dead,” Mr Teyssen said in Brussels this week, adding: “I don’t know a single person in the world that would invest a dime based on ETS signals.”
These views reflect a sharpening debate within Europe about the future of the market – known as the European Union emissions trading scheme – that is the cornerstone of the bloc’s ambition to lead the fight against global warming.
