EU Set To Get Tough On States' CO2 Emissions Plans
Date: 28-Nov-06
Country: BELGIUM
Author: Jeff Mason
The European Union's executive will decide to accept or reject plans allocating pollution rights that cover more than 60 percent of the factories in the bloc's emissions trading scheme for the 2008-2012 period.
The highly anticipated decisions concern plans from 11 EU nations -- Britain, France, Germany, Greece, Ireland, Latvia, Lithuania, Luxembourg, Malta, Slovakia and Sweden -- European Commission spokeswoman Barbara Helfferich said on Monday.
The big number of countries covered in the first round of decisions for 2008-2012 showed the Commission wants to send a clear signal to the market about the credibility of the system.
"Our decision on Wednesday will reflect the need to create scarcity in the market and will put the second phase of the emissions trading scheme on solid ground -- on very solid ground," Helfferich said.
The EU's scheme is its key tool to meet targets for reducing greenhouse gas emissions under the Kyoto Protocol and puts a limit on the amount of carbon dioxide (CO2) that big polluters such as power plants and oil refineries can emit.
Companies buy more rights to pollute if they overshoot their target or sell them if they come in below the cap. Companies face fines if they do not have enough pollution rights to cover their actual emissions.
But 2005 data showed EU governments gave industry more emissions permits than needed, leading to a CO2 price crash.
European Environment Commissioner Stavros Dimas has already criticised plans sent to Brussels as too lax and the Commission has negotiated with governments about possible changes.
"It does now look quite promising that the Commission is going to come down quite heavily on the member states that haven't put sufficient caps to meet their Kyoto commitments," said Kirsty Clough, a climate expert at environmental group WWF.
GERMANY CHANGES, NORWAY TO JOIN
Miriam Munnich, industrial affairs advisor at Europeaan employers group UNICE, urged the Commission to avoid major changes to the plans submitted by member states.
"If the cap is dramatically reduced ... that will mean that many of these companies do not have a possibility to really expand and grow," she said.
Germany said on Friday it would cut its CO2 quota in 2008-2012 to 465 million tonnes per year from 482 million.
The country, Europe's biggest emitter of CO2, may be asked to make further changes. Germany's plan to give new industrial plants built between 2008 and 2012 unlimited rights to emit CO2 is not in line with the scheme, an EU official said.
"This contradicts the system," the official said.
Germany proposed in June to give new industrial plants as many carbon emissions permits as they needed to 2022, provided they met minimum standards on clean energy technology.
Analysts said such a move would encourage electricity producers to build new coal-fired power plants.
Dutch government officials said the Commission was likely to accept its plan.
Executives from several top European companies on Monday urged Brussels to clarify what targets will be set after 2012 to help them plan better.
The scheme looks set to get bigger soon. An EU source said Norway is likely to become the first non-EU country to join it, in 2008. Norway will submit a CO2 allocation plan for 2008-2012 to the European Commission, the source told Reuters.
Along with Bulgaria and Romania, which join the 25-nation bloc in January, that will mean 28 countries are covered by the scheme.
(additional reporting by Anna Mudeva in Amsterdam)