Sep 2, 2008

EU Backtracking On Its Climate Change Scheme

EU lawmakers urge caution on bloc's carbon curbs
by Reuters News on 28 August 2008, 17:58 PM 0 comments , 342 views Categories: Reuters News
By Pete Harrison
UPDATE 2- BRUSSELS, Aug 28 (Reuters) - The European Union's response to global warming could be watered down to cut the impact on heavy industry and ensure the bloc takes a cautious approach to tougher goals, a document seen by Reuters shows.
The moves aimed at protecting EU industry from overseas competitors have alarmed environmentalists, who accuse lawmakers of already weakening curbs on emissions from cars and aviation.
As part of its drive to lead the world in fighting climate change, the 27-country EU has committed to cutting carbon dioxide emissions by one fifth by 2020, compared to 1990 levels.
It is also considering increasing the cut to 30 percent if big countries such as China and the United States commit to their own reductions in ongoing global climate treaty talks.
But members of the European Parliament's influential industry committee are mulling an amendment that would demand a full impact assessment before cutting beyond 20 percent.
"I think we should bring the latest science into any decision," Swedish liberal MEP Lena Ek, who drafted the "compromise amendments", told Reuters on Thursday.
Any move to alter the 20 percent cuts would also be subjected to full legislative scrutiny by the EU's member states and EU lawmakers before becoming law.
"This could potentially fatally undermine an automatic move to a 30 percent cut in emissions, as the EU would have to go through the whole co-decision procedure," WWF campaigner Kirsty Clough said on Thursday.
But Ek said any impact assessment might equally allow the EU to increase its ambition for carbon dioxide (CO2) curbs.
The committee will vote on the proposed amendments in two weeks, with a full parliament vote later in the year.
Industry committee members returning to work this week are also considering amendments to alter the EU's flagship Emission Trading Scheme (ETS) so it has less impact on energy-intensive industries such as steel.
"We have to be stricter about preparing a Plan B -- for the chance that there will be no international agreement," said Ek.
Under present proposals, from 2013 the scheme will force power generators to buy permits for all their emissions of CO2, the main greenhouse gas blamed for global warming.
The European Commission is considering whether to allow steel and other energy-intensive industries to continue to get free permits, to safeguard their global competitiveness.
EU steelmakers say the Commission's current plans could cost the sector more than 50 billion euros ($78 billion) between 2013 and 2020 and put thousands of jobs at risk.
The steel industry is particularly worried changes would require steelmakers to buy CO2 emissions permits for electricity that it produces by recycling waste gas from blast furnaces. The industry committee would exempt such electricity.
Ek said new incentives were needed to prevent industry wasting such resources, as well as to promote combined heat and power schemes and district heating.
"It's a disgrace to see the flaring of waste gases as you drive through Europe, especially with the high energy costs of today," she said.
The new amendments also suggest issuing extra permits to energy-intensive industries to compensate them for higher power prices as a result of the carbon trading scheme.
"However ambitious we are with climate legislation, we can't make European companies uncompetitive in the global market, particularly high energy users, and that's what the Industry Committee will be looking at," said Welsh socialist MEP Eluned Morgan.
But WWF's Clough warned such moves cut incentives for energy-intensive industries to reduce power consumption.

EU should increase CER import limit -lawmakers
by Reuters News on 28 August 2008, 17:28 PM 2 comments , 466 views Categories: Reuters News
UPDATE 1- BRUSSELS, Aug 28 (Reuters) - The European Union should allow industry to offset a quarter of the cuts in greenhouse gases they have to make under emissions caps from 2013-20, EU lawmakers say in draft proposals seen by Reuters on Thursday.If enacted under an EU Parliament vote expected in coming months, and agreed by member states, the proposals by the EU parliament industry committee would allow more importing of CERs and ERUs compared with the EU executive Commission's proposals in January.That would be good news for EU industry, by cutting the cost of meeting emissions caps, and for carbon traders in a rapidly expanding, $64 billion emissions market."It's higher than what we have now, but it's not that much more because it's worded in terms of percentage of effort, rather than of the cap," said Societe Generale analyst Emmanuel Fages.The Commission's January proposals effectively froze the use of offsets from 2008-20 at a previously agreed cap of 1.4 billion tonnes for 2008-12.The lawmakers' new amendments would allow businesses from 2013 to use additional offsets equal to a quarter of their emissions cuts compared to a 2008-2012 baseline."The annual use of credits (offsets) by installations... shall not exceed a quantity equal to 25 percent of the greenhouse gas emission reductions required for the installations covered.... (compared to) the average emissions of the installations concerned in the period 2008 to 2012," the proposed amendments said.The average cap from 2008-12 under the EU emissions trading scheme is 2.082 billion tonnes of carbon dioxide (CO2), while the proposed average cap from 2013-20 is 1.846 billion tonnes, Deutsche Bank research published in January shows.
That implies an import increase of 470.5 million CERs/ERUs between 2013-2020, or 58.8 million annually.
The Commission's January proposals had assumed there was no new global agreement to extend or replace the Kyoto Protocol, and allowed more offsetting in the event of such a deal, while the lawmakers amendments were regardless of such agreement."This would enter into force in 2013 with or without an international agreement," said Lena Ek, the Swedish member of the European Parliament guiding the emissions trading legislation for the industry committee.The committee will vote in two weeks' time on the amendments which Ek said would likely form the core of the proposals voted on by the EU parliament in coming months. An agreement would then have to be approved by member states.The industry committee backed the Commission's January proposals that in the absence of a new climate treaty offsets should only come from least developed countries for new emissions-cutting projects from 2013.If a climate treaty were agreed offsets -- called certified emissions reductions (CERs) and emissions reduction units (ERUs) -- should only be allowed from countries which had ratified that agreement, the amendments added.The proposals backed emissions-cutting projects supporting renewable energy, energy efficiency, reforestation, reduced emissions from deforestation and other sustainable forestry projects and activities.