France Calls for EU Carbon Price Corridor

France has proposed the establishment of a 'price corridor' to stabilize the volatile prices in the EU carbon market. This measure aims to provide consistent pricing signals to companies and reduce the influence of financial speculators. The proposal is backed by some EU member states.

France has taken a firm stance in urging the European Union to impose restrictions on carbon market prices by establishing a 'price corridor' to mitigate volatile price swings, according to a government document obtained by Reuters.

The emissions trading system, a central component of the EU's CO2 reduction strategy, mandates that emitters purchase a permit for each tonne of CO2, thereby incentivizing reduced emissions. However, the system faces criticism over price volatility driven by financial speculation.

French climate minister Agnès Pannier-Runacher emphasized the need for long-term pricing signals, and France seeks support from other EU members, with some backing already, while the European Commission has yet to comment. Analysts predict a rise in carbon prices in the coming years.

(With inputs from agencies.)