The European Commission is likely to prepare a legal proposal on reforming its emissions trading scheme (EU ETS) before the end of the year, EU Energy Commissioner Guenther Oettinger said on Monday.

Speaking at a European Wind Energy Association conference in Copenhagen, Oettinger said the 27-nation bloc’s trading scheme was failing to set a strong enough price to encourage investment in low carbon energy.

“At the moment, there is no price signal. We have to prepare a proposal. There is an expectation from the European Parliament,” Oettinger said. “We hope to come to a conclusion before the end of the year.”

Prices for carbon permits under the EU ETS are trading at around 6.90 euros ($9.03) a tonne. They hit a new record low of 5.99 euros on April 4, well below the level needed to encourage green investment.

The trading scheme caps emissions from industrial plants and utilities, forcing them to buy carbon permits to cover their emissions output.

Source: Reuters