EU readies carbon allowance cuts to reduce surplus

Power plants and other participants in the European Union’s emissions trading system will find carbon allowances harder to come by starting in September, because of the removal of a block of allowances from the system.

The number of carbon allowances that could be auctioned between September 2019 and August 2020 would be cut by 400 million on the basis that there are too many allowances, according to the European Commission, the EU’s executive arm.

About 1.65 billion too many carbon allowances, each of which represents the right to emit one metric ton of carbon dioxide, were circulating in the ETS in 2018, the commission said May 15. The 400 million allowances to be removed represent 24% of the total surplus amount.

Full article published at Bloomberg Environment.