Update: EU lawmakers opt for higher reduction rate in carbon market reforms

[BRUSSELS] Lawmakers in the European Parliament Environment Committee on Thursday adopted a long-awaited draft proposal for a reform of the carbon market after 2020, including a higher rate at which permits should be removed from the market.

The political groups in the body also endorsed a draft proposal that will push for a doubling of the rate at which the Market Stability Reserve (MSR) soaks up excess allowances to 24 per cent in the four years until 2022.

Benchmark European carbon prices were down 2.2 per cent on Thursday, after the vote. A day earlier the Dec-16 contract had rose on expectations of the vote going ahead after EU lawmakers reached a compromise deal.

The EU's emission trading system is designed to make big polluters pay for their emissions by buying carbon permits, but a surplus of carbon credits has depressed prices leading the European Commission to try to reform the market.

REUTERS