Rhodia demands changes to EU ETS post-2012

12 July 2007 17:32  [Source: ICIS news]

PARIS (ICIS news)--Countries that fail to agree to reduce their carbon dioxide (CO2) emissions after 2012 should face an import tax to stop European industry being competitively disadvantaged, said Rhodia director-general Jean-Pierre Clamadieu on Thursday.

Clamadieu praised the European Union Emissions Trading Scheme (EU ETS) as an effective tool to cut global greenhouse gases, but suggested a carbon tax should be imposed on imports from countries that fail to agree a post-Kyoto agreement.

He praised the scheme for delivering a reliable system for measuring carbon dioxide (CO2) emissions and said this meant industry could now act effectively to cut them.

 

He dismissed criticisms of phase I of the scheme, under which an excess of carbon credits were awarded, saying it had only ever been a trial phase and had allowed phase II - which is set to be a much greater success thanks to the European Commission's strict management of carbon caps - to come into being.

 

However, Clamadieu said after 2012 carbon allowances should be distributed for a period of 10 years, not three or four years as was the case with phase I and II of the scheme, to give more stability to industry, and the scheme should be revised every three years to take into effect economic growth.

 

The EU ETS would likewise work more efficiently if the carbon allowances were distributed per sector rather than per country and per installation as is the case today, Clamadieu added.

 

Even with CO2 trading at rock-bottom prices during phase 1, the EU ETS is held responsible for suppressing the rise in emissions in Europe to 0.8%, compared to the 4-7% rise predicted without the scheme.

 

A figure of around €40 ($55) per tonne of CO2 would be the price necessary for the carbon market to become competitive, claimed Philippe Rosier, director general of Rhodia Energy Services.

 

However, he said the current price of around €21/t CO2 was “reasonable” and suggested that less attention be given to price fluctuations, saying these were normal with so many long and short term factors at play.

 

($1 = €0.73)

By: Philippa Jones
+44 20 8652 3214

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