EU Industrial emissions quotas reduced
The industrial emissions quotas are being reduced by 10% compared with what governments had initially wanted for the phase 2008-2012, according to Reuters. European member states are threatening to appeal to the decision.
The EC assures that the decision is key to reach the targets for reduction of greenhouse gases and to strengthen the European Trading Scheme (ETS). Hopes are that the US will take the scheme on board at last. US senators have already tabled proposals to introduce the carbon market, pending its apparent success in Europe.
” “We have assured a robust market with real emission reductions which will constitute an important contribution to meeting our Kyoto target,” EU Environment Commissioner Stavros Dimas said in a statement.
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This time the EC has got it about right, analysts say, estimating a shortage of permits equivalent to about 250 million tons of CO2 emissions per year from 2008-12.
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But the troubles for Europe’s trading scheme are not over. At least seven member states have said they will appeal against the Commission: Lithuania, Slovakia, Poland, Estonia, Hungary, the Czech Republic and Latvia.
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In other problems, Europe’s power companies have passed on to electricity consumers the cost of emissions permits they get for free, and will earn 20 billion euros ($28.74 billion) in windfall profits annually as a result, analysts say, a practice attracting mounting criticism.
Businesses can make up the expected shortfall in EU permits either by buying carbon offsets from developing countries, under a Kyoto Protocol trading scheme, or cutting their own emissions.
Uncertainty about these costs has left analysts unsure about the future price of EU permits, also called EU allowances (EUAs), with price forecasts ranging from 20 to 40 euros.”
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