A senior European Commission official has pushed back against proposals for stronger measures to curb EU ETS price volatility put forward earlier this month by the European Parliament’s lead lawmaker on the bloc’s carbon market reform, Peter Liese.

Liese, the European Parliament’s lead rapporteur on the EU ETS review, has proposed a new price intervention trigger under which 25 million allowances would be released from the Market Stability Reserve (MSR) if the average EUA price over three months rises by more than 25% compared with the average over the preceding 12 months.

Article 29a, formally titled “Measures in the event of excessive price fluctuations”, establishes a rule-based safeguard against excessive carbon-price increases. Under the current framework, it can trigger the release of 75 million allowances from the MSR if the average EUA price over the preceding six months exceeds 2.4 times the average price over the preceding two years.

While the Commission did not propose changes to Article 29a in its July EU ETS revision proposal, the executive said it would continue to monitor and evaluate the functioning of the carbon market through its annual Carbon Market Report.

Liese’s proposed changes would make Article 29a considerably more sensitive to price movements and, for the first time, introduce a symmetrical mechanism for falling prices, an approach that has recently drawn criticism, including from Rosalinde van der Vlies, director for carbon markets at the European Commission’s climate directorate.

“Trying to engineer a carbon price through frequent market intervention will lead to less cost effectiveness and will reduce market and investment predictability. It will ultimately weaken our well-designed ETS system,” Van der Vlies told the European Parliament’s environment committee on Thursday.

The rapporteur’s proposal would lower the threshold for intervention substantially compared with the existing mechanism, while shortening the period over which price movements are assessed. It would also introduce a downside trigger: if the three-month average EUA price falls more than 25% below the preceding 12-month average, 25 million allowances would be transferred into the MSR.

This would mark a significant departure from the current Article 29a framework, which provides for intervention in response to exceptional price increases but does not contain an equivalent mechanism for sharp declines in allowance prices.