The European Parliament's environment committee is expected to vote today in favour of to rescue the low price of carbon in the EU's Emissions Trading Scheme, following a compromise arrangement.

Last April, the full European Parliament voted narrowly against a measure to withhold allowances on the ETS from the market in an effort to boost low prices, and decided to send it back to the committee for refinement. The vote was lost by just 19 votes, with 63 abstentions.

A key objection last time came from an alliance of liberals and conservatives who were not amenable to interference in the free market.

The compromise which has brought many of them onside involves returning the postponed permits back to the market just one year after the withdrawal of the last allowance.

There was also a guarantee that this would be a one-off interference in the market. Other European lawmakers still remain opposed to the move, however.

Those supporting the measure include British climate change and energy secretary Ed Davey, who yesterday told business leaders that the EU needs to halve its greenhouse gas emissions by 2030 as part of a global deal to be brokered in 2015, and spoke in favour of carbon markets as a key tool to help meet the goal.

EU carbon prices rose two percent on Tuesday in nervous anticipation of the vote, and the European Union sold 3.462 million spot EU carbon permits from the third phase (2013-2020) of its emissions trading scheme on EEX at 4.63 euros a tonne each.

A positive vote for the proposed market fix in the plenary would mandate Matthias Groote, the German Socialist lawmaker in charge of the measure in the assembly, to start talks with representatives of national governments on the final wording of the legislation. The outcome of the talks would still need official approval by the Parliament and EU ministers.

A strong carbon price would help to support much-needed investment in clean technology across the European Union.

Story: David Thorpe, News Editor