Third Phase of EU Carbon Trading to go Through 2020
Date: 31-Oct-07
Country: LUXEMBOURG
Author: Jeff Mason
The European Commission is working on a revision of the EU emissions trading system, including the possibility of adding gases and sectors that are not currently included.
Companies and traders are also anxious to know the time frame for the next trading period. A Commission official said phase three would go to 2020, conforming with EU goals to reduce greenhouse gas emissions by at least 20 percent by that year compared to 1990 levels.
"I think you can assume that," the Commission official told Reuters when asked whether the third phase would go to 2020.
Industry has long called for the EU to set longer trading periods so it has more clarity for long-term planning. The first phase of the scheme went from 2005-2007 and the second phase runs from 2008-2012.
The Commission's delayed proposals revising the scheme as well as legislation governing renewable energy use in the bloc are now slated to be published on Jan. 23, he told reporters on the sidelines of an EU environment ministers meeting.
The EU trading system sets limits on the amount of CO2 that power companies, oil refineries and other energy-intensive businesses may emit, allowing them to buy or sell carbon permits based on whether they overshoot or come beneath their targets.
The EU has already decided to add airlines to the trading system. The official could not yet say whether the Commission would propose as part of its review that shipping be added.
The official said some EU states had asked for nitrous oxide (N20) to be included in the scheme, possibly as early as the second phase. The Commission was also studying adding methane from coal mines.
The EU system is its key instrument to reduce greenhouse gas emissions and meet commitments under the Kyoto Protocol.
Ministers on Tuesday discussed the EU's negotiating position for a UN meeting in Bali, Indonesia in December, where talks for a successor pact to the Kyoto treaty are slated to begin.
German Environment Minister Sigmar Gabriel said he did not expect the United States to block the start of the talks despite the Bush administration's long-standing opposition to mandatory caps on carbon emissions, a key component of Kyoto.
Conclusions from Tuesday's meeting emphasise the EU's wish for an expanded carbon market and measures to address emissions from planes and ships.