FIA and nine industry bodies have co-signed a letter expressing concern that the European Commission may be considering intervention in the EU Emissions Trading System, either through position limits or some other action, ahead of the publication of the European Securities and Markets Authority’s final report on trading behaviour in the EU carbon market.
The ETS market consists of a wide variety of participants – each of which has a critical role in the efficient functioning of the market and reaching Europe’s decarbonisation targets. The introduction of position limits or restricting the participation of financial and non-financial actors would run the risk of weakening the market and making it more expensive and complex for compliance entities to hedge for the future and plan for investments into low carbon alternatives.
The industry bodies call on policymakers to wait for ESMA’s report, due in the coming weeks, which should be the basis for discussion. In preliminary findings in November, ESMA found no evidence of trading abuse.
"It would be against the principles of Better Regulation to pre-empt this report and would risk finding solutions to a problem that may or may not exist," the letter says.