The emission trading system (EU ETS) has created the world's first major carbon market and an EU-wide carbon price as a key tool for the efficient reduction of its industrial emissions costs. Despite a reduction in emissions since the start of the EU ETS, the current crisis and an over-allocation of credits means the system currently faces a significant surplus of allowances resulting in a carbon price of around 4 euros/tnCO2 (compared to the 30 euros/tnCO2 envisaged when the climate and energy package was adopted).
In order to address this issue, the Commission presented a proposal aiming at clarifying the legislative provisions on the timing of auctions of allowances in order to be able to adapt the auction timetable (‘backloading’). However, backloading is a short-term measure, not a solution to the current imbalances. Rather, it is an option that ensures the stability of the EU ETS until the necessary long-term structural measures are adopted.