UPDATE 3-Germany backs EU carbon market reform by 2017

Thu Jun 12, 2014 4:50pm GMT

* Analysts say would push carbon prices higher, sooner

* Measure likely to face opposition from industry, eastern states (Adds quotes from German environment minister)

By Ben Garside and Barbara Lewis

BONN/LUXEMBOURG, June 12 (Reuters) - The German government wants the EU's carbon market reform plan to be implemented by 2017, four years earlier than the European Commission has proposed, Germany's Environment Minister Barbara Hendricks said on Thursday.

The European Commission, the EU executive, has proposed setting up a so-called market stability reserve from 2021 to hold and release permits to balance supply in the bloc's Emissions Trading System (ETS) and better respond to economic changes.

Analysts say that starting the measure earlier would cut the market's massive oversupply faster and push carbon prices higher much more quickly.

The government in Germany, Europe's biggest CO2 emitter, reached its position after "several weeks of consultations" to try to spur debate on setting wider climate change goals, Hendricks said on the sidelines of a meeting of EU environment ministers in Luxembourg.

"With our position, we send a clear message for the climate change debate in the European Union. Germany wants to help ensure that the EU sets ambitious goals," Hendricks said.

She also said Germany wanted to cancel permanently the 900 million permits that are in the process of being temporarily withheld under the EU's separate backloading measure.   Continued...

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