The European Union is preparing to make its emissions-trading system immune to a supply turmoil that may happen if Brexit talks fail and the U.K. leaves the world"™s largest carbon market.
The European Parliament will vote on Wednesday on a proposal that would prevent companies and airlines in the EU Emissions Trading System using carbon allowances issued by the U.K. from 2018 if the country falls out of the cap-and-trade program, according to a draft document obtained by Bloomberg News. The provision, to be sponsored by four political groups, will be submitted as part of a revision of the bloc"™s carbon market law to update rules on aviation.
Before the vote, the draft law will be discussed by members of the EU Parliament on Monday after the assembly"™s plenary session starts at 5 p.m. in Strasbourg, France. The Brexit-related provision will be submitted as a joint amendment sponsored by the Christian Democrat, Socialist, Liberal and Green groups.
The EU carbon market imposes emission quotas on around 12,000 facilities owned by manufacturers and utilities, and forces those that exceed their caps to buy permits from businesses that emit less. It also covers aviation under a law that is being revised following a global deal to cut pollution by airlines.
EU carbon allowances for December fell as much as 3.5 percent on Monday, breaking a five-day winning streak on concerns that the Brexit-related proposal may reduce the willingness of participants to trade with U.K. entities. The contract was at 6.87 euros on the ICE Futures Europe exchange at 12:15 p.m. in London…
