European Union carbon prices jumped after the EU Parliament environment committee backed a draft rule requiring the bloc’s executive to propose withholding some permits in the next phase of its carbon market.

Carbon allowances rose as much as 32 percent after deputies in the committee voted today in favor of a compromise amendment to an energy efficiency law that calls on the European Commission to change by the end of 2012 its regulation in order to “withhold a significant amount of allowances.”

The amendment would have to be backed by majority of deputies in the full parliament as well as member states to become a law. European Union emission permits for delivery in December next year traded as high as 9.75 euros ($12.75) as of 11:23 a.m. on the ICE Futures Europe exchange in London.

“The compromise amendment was adopted almost unanimously,” Peter Liese, a deputy from the European People’s Party in the parliament, told a news conference in Brussels today. “It may be a benchmark in the plenary vote.”

Under the same amendment, the committee voted to add in a non-binding part of the directive a clause that would oblige the commission to set the number of permits to be set aside at such a level that wouldn’t push carbon prices above 30 euros.

“It’s an amendment of change in the current policy,” Liese said. “If you decide that price is too low, you’ve also got to decide when a price is too high.”

Curb Oversupply

Carbon allowances, which earlier this month slumped to a four-year low, today pared their loss to 37 percent this year on speculation that legislators will curb oversupply of permits after the energy efficiency comes into force and reduces demand for emission rights.

The commission first came up in 2010 with the idea of setting aside allowances in the next phase of the emissions program starting in 2013 and also included a reference to such a tool in a March 2011 policy paper, known as the low-carbon 2050 road map.

Member states remain divided on whether to raise the stringency of the EU’s climate policies. While western European countries have voiced support for tighter pollution caps on companies, eastern nations have in previous years tended to favor a more cautious approach.

The emissions trading system is the cornerstone of the EU policy to cut greenhouse gases blamed for climate change. It imposes pollution limits on more than 11,000 utilities and manufacturers, leading to a cap in 2020 that will be 21 percent less than 2005 discharges.

Linear Reduction

In a separate vote, the deputies backed a change in the so- called linear reduction factor, by which the cap on polluters in the EU emission trading system decreases annually. The factor should be raised to 2.25 percent as of 2014 from the current 1.74 percent, according to the amendment.

Another amendment, setting the number of permits to be set aside at 1.4 billion metric tons, passed by “a very narrow margin” and will “definitely not survive” in the committee on industry, which also discusses the directive, and in the plenary, Liese said.