* Fuller detail, ETS market review expected later in year
* Sources say still time to get a deal before 2013
* Amendment aims to ensure legislative certainty
By Barbara Lewis and Francesco Guarascio
BRUSSELS, July 17 The European Commission will
on July 25 debate a legal framework to revise the timetable for
auctioning carbon allowances to bolster prices on the EU's
weakened Emissions Trading Scheme, a document seen by Reuters
Detail on the number of allowances that could be withheld
and a carbon market review is now not expected until after the
Commission returns from its summer recess in September, three
separate EU sources said on Tuesday, speaking on condition of
Carbon allowances have collapsed to record lows under the
burden of surplus supply following recession.
The Commission had said it would announce before its August
summer break plans to hold back some allowances beginning in
2013, a process referred to as backloading.
An internal calendar seen by Reuters says the Commission,
the EU's executive arm, will debate an amendment to the EU ETS
law "to clarify provisions on the timing of auctions" on July
The amendment will make clear that "the Commission is able
to modify (the) auctioning time profile," it adds.
The document does not mention figures on how many allowances
could be withheld or a review of the carbon market, originally
expected next year, but which Climate Commissioner Connie
Hedegaard has said she was bringing forward.
Commission spokesman Isaac Valero-Ladron said he could not
confirm the date when the Commission would publish its proposals
to support the carbon market, but he said the intention was
still to make an announcement before August.
"The Commission reaffirms its plans to come up with
proposals this month," he said.
Hedegaard announced in April the Commission's plan to delay
the auction of some allowances at the start of the next phase of
the ETS in 2013.
She said then the idea was to deliver a quick fix, avoiding
the full-scale EU process and difficult political argument
linked with deeper reforms, such as a permanent removal of
The sources said even if details did not emerge until after
the Commission resumes business in September, there was time to
get agreement before the ETS enters its next phase, when new
industries join and far fewer allowances are doled out for free.
Sanjeev Kumar, senior associate at non-governmental
organisation E3G, said tackling an amendment first was "the
right thing to do".
EU sources said in June draft proposals looked at the
possibility of delaying the sale of anywhere between 400 million
and 1.2 billion carbon allowances.
Kumar said even 1.2 billion allowances would not be enough,
favouring instead "anything in the region of 2 billion".
Prices on the EU ETS hit a record low of 5.99 euros per
tonne in April. They have recovered to above 7 euros,
helped by the anticipation of action to support the market.
The EU parliament and some sections of industry have called
for urgent intervention, arguing the ETS is too weak to provide
an incentive for investment in low carbon energy.
Others say an increase in the carbon price would be a burden
in difficult financial times.
Equally, while many governments are keen to provide support
for renewable energy, Poland, which is reliant on
carbon-intensive coal, has been at the forefront of opposition
to anything that would drive up the price of ETS allowances.
"The 'backloading' proposal is probably buying time until
some economic improvement in 2-3 years, which will push up
demand and production," Graham Van't Hoff, executive vice
president of CO2 and alternative energies at Royal Dutch Shell