EU Commission criticizes Czech Republic together with several other EU countries for failing to submit their emission allocation plans for the period 2008 - 2012 by the June’s deadline. The reason Czech Republic failed to meet the deadline is the current political deadlock that still continues as current Ministry of environment leaves this decision for its follower. Countries have now one month to meet the requirements.
Our view:
As the surplus in period 2005 – 2007 lead to price collapse of CO2 credits, we expect the allocation of CO2 emissions will be cut for following period. The price instability and uncertainty about development of CO2 allocations raise worries about long term investments. However we see this news as neutral until the allocation plans are known for all EU countries.