Finland, Spain to Miss EU Carbon Emissions
Date: 19-Jun-06
Country: UK
The European Commission (EC) has said it could sue laggards, but the two countries joined Britain and Hungary in saying they would miss the deadline, as officials struggle for consensus between industry factions, green lobbies and ministries.
Governments are due to propose limits on pollution permits for the second stage of the EU carbon market, from 2008-12, which will decide whether the EU meets its Kyoto targets and affect carbon and power prices across the 25-member bloc.
Spain said it would be at least two weeks late.
"It's a very complex issue which will determine whether Spain meets its Kyoto commitments ... a delay means we will have a better plan," a Madrid Environment Ministry spokeswoman said.
Data on a United Nations climate change website shows Spanish emissions were 48 percent above 1990 levels in 2004, compared to a Kyoto target of 15 percent above by 2008-12.
Finnish Trade and Industry ministry officials said their plan would be ready in August-September; Britain will be ready in late summer, sources close to the environment ministry say.
The EU carbon market is supposed to restrict the supply of free emission permits to heavy industry, driving cuts in greenhouse gases and ensuring the price of credits to emit carbon dioxide remains high enough to make non-fossil energy sources competitive -- including nuclear reactors.
The trouble is finding agreement on permit caps: much of industry sees a threat from a hardline approach, fearing that power prices will be driven much higher, harming businesses and consumers.
In favour of tough caps are companies which see opportunities from climate change, such as emerging clean energy technologies, as well as green groups and some unions.
The European Commission said last month that most EU states undershot their permit quotas in 2005, which analysts and green groups saw as proof that targets had been set too low for 2005-07, the market's first phase.
They called for tougher caps from 2008 and the EC said lessons should be learned, but five out of eight draft phase 2 plans so far appear more lax.
"Governments have known about this deadline for many months and it's disappointing so many are off track, or tabling over-generous allocations," said Keith Allott, UK Head of Climate Change at green group WWF.
Windfall profits have also fuelled passions on quotas -- most of the power sector got more permits than they needed in 2005, without paying, but still passed on pollution costs to energy consumers.
French State-owned utility EDF said on Friday that France's electricity sector should get a 10-percent increase in quota in phase 2 of the scheme.
A spokesman for the German environment ministry rejected any talk of Germany being late to submit its target.
"The government will stick to the June 30 deadline set by the EU," he said.
-- Reporting by Julia Hayley in Madrid, Muriel Boselli in Paris, Sami Torma in Helsinki and Vera Eckert in Frankfurt
