Italy Cuts C02 Allocation Plan, Wins EU Approval
Date: 26-May-05
Country: BELGIUM
Author: Jeff Mason
The cut amounts to a reduction of 23 million tonnes of CO2 per year compared to the country's original proposal, paving the way for Italy to join the European Union scheme to reduce pollution from the main gas blamed for global warming.
"I am very glad that Italy has accepted our arguments and significantly cut the number of allowances they intended to grant," Environment Commissioner Stavros Dimas said in a statement.
The EU scheme, launched in January, is the key part of the 25-nation bloc's efforts to meet environmental commitments under the Kyoto Protocol.
It sets limits on the amount of C02 energy-intensive industries can emit and allows them to buy or sell the right to pollute on a market, depending on whether installations overshoot or undercut their targets.
The tightening of the Italian plan helped boost EU carbon dioxide emission prices to a new record on Wednesday, with allowances for 2005 hitting a high of 19.75 euros a tonne.
Only Greece has yet to have its plan approved. Commission spokeswoman Barbara Helfferich said a decision on the Greek plan would come in the next week.
Italy's allocation plan covers 1,240 installations, all of which qualify for trading. These plants will be allocated allowances to emit an annual average of 232.5 million tonnes of CO2 for the 2005-2007 trading period, the Commission said.
STRICT CUTS
Rome had initially wanted to allocate allowances for an average of 255.5 million tonnes per year, but accepted the Commission's argument that this would not have been in line with the EU's emission trading rules, it added.
Some issues are still outstanding, however. The Commission said Italy must drop a provision from its plan that would allow it to revise the number of allowances for specific industrial installations later, after the plan was finalised.
Part of the allowances agreed upon have not yet been allocated to some installations, the Commission said, and it wants details on that, too.
Italy increased the number of installations covered by the plan from its original proposal, the Commission said.
"The Commission required Italy to add some plants into the emissions trading scheme, which means that the cut is in fact greater than 9 percent," environmental brokerage GreenStream Network deputy CEO Jussi Nykanen said in a statement.
Italian Environment Minister Altero Matteoli welcomed the Commission decision, but seemed to indicate that a cut had not been made.
"I am very satisfied that the plan that has been approved is in line with the criteria suggested by the Italian government," he said in a statement.
"By comparison with the initial plan put forward by the European Commission, which called for a reduction in emissions from the Italian industrial sector, the plan that has been approved reflects what Italian industry has already achieved."
Italy's Greens party said Matteoli was hiding the truth.
"Our country has been humiliated by its obvious untrustworthiness," said Green Party Senator Sauro Turroni.
"In his usual shameless fashion, Matteoli will present this umpteenth slap in the face for the government's environment policy as a positive result."
(additional reporting by Margaret Orgill in London and Crispian Balmer in Rome)
