EU carbon prices climbed by more than 3% on Tuesday on speculation that EU nations would back an earlier start to the MSR after a tweet by a Prague-based correspondent said that the Czech Republic might be prepared to soften its stance.
Dec-15 EUAs climbed to as high as €7.41 following a tweet from a Euractiv journalist saying the Czechs could support a 2019 MSR start if “reasonable compensations” were negotiated.
The front-year futures, trading on ICE Futures Europe, eventually settled up 20 cents at €7.39 on volume of 13.6 million units.
A spokeswoman with the Czech environment ministry said the country’s official position backing a 2021 start has not changed.
However, when asked whether the EurActiv tweet was incorrect, she declined to comment.
“There’s been plenty of debate but with the official discussions beginning tomorrow, our official position remains unchanged,” she added, referring to Wednesday’s Coreper meeting.
Sources told Carbon Pulse last week that western EU countries including Germany and the UK, which back an earlier start, were attempting to forge a deal with individual countries in the eastern camp, which is pushing for 2021.
The Czechs had previously been supportive to strengthening the MSR by putting the 900 million backloaded EUAs directly into it, said Marcus Ferdinand, an analyst at Thomson Reuters Point Carbon
“That perhaps shows they have a bit softer stance than other signatories (to the 2021 start) … we interpret this as a possibility they could be a bit more flexible on the start date as well,” he said.
One source told Carbon Pulse that the western group had also approached Lithuania in an attempt to lure it away from the blocking minority, which is led by Poland.
Point Carbon analysts predict that any deal among the EU Council of member states involving an earlier start might not emerge by tomorrow’s Coreper meeting.
“We currently see it as more likely that the Council will enter the May 5 trilogue meeting with a 2021 rather than a 2019 position, keeping the internal debate open until after the next trilogue,” Ferdinand added.
The EU Council, Parliament and Commission must all agree on the measure for it to be made law and have scheduled a further trilogue on the issue on May 26.
— Adéla Denková (@Adela_Denkova) April 28, 2015
— Point Carbon (@PointCarbonTeam) April 28, 2015
by Ben Garside and Mike Szabo – email@example.com