In the trigger zone

What proposed changes to Article 29a mean for EU carbon prices

Initial indications suggest EU lawmakers are seeking to amend the EU ETS mechanism by which additional allowance supply could be made available, in the event that prices rise too high, too fast. Known as Article 29a of the EU ETS Directive, this is the mechanism by which the European Commission (EC) could intervene in the EU ETS to control prices should they be deemed not to be reflective of underlying fundamentals. As its currently written:

“1. If, for more than six consecutive months, the allowance price is more than three times the average price of allowances during the two preceding years on the European carbon market, the Commission shall immediately convene a meeting of the Committee established by Article 9 of Decision No 280/2004/EC.”