22 January 2008 16:54 [Source: ICIS news]
By Nigel Davis
Much of the pressure to meet the EU’s tough carbon control targets will fall on heavy industries such as aluminium, steel and chemicals as well as the big power producers.
These carbon ‘polluters’ will have to pay to trade or curb emissions. Crucially, they cannot expect to receive free carbon allocations under ?xml:namespace>
Under the initial and, current, second phase of the ETS, carbon permits have been allocated by the EC and member state governments.
Chemical producers and other energy-intensive industrial sectors have been forthright in their opposition to additional carbon costs.
They want to see a carbon control scheme based more firmly on what companies actually do to curb carbon dioxide emissions rather than a free-for-all in which carbon allocations hand out windfall profits to some.
European industry will find it difficult enough to operate in a more restrictive carbon control environment. It can do without being saddled with unknown upfront costs.
Enterprise commissioner Gunter Verheugen has fought his corner in the debate within the EC over its carbon control proposals but appears to have been sidelined.
Verheugen has stressed that the EU has an ambitious approach to climate control but one that is realistic. Heavy industry believes that not only it competitiveness but its very existence is under threat.
The EC proposals will have a rocky ride through the political process involving the European parliament and the EU’s member states.
There has been clear opposition from
An alliance of energy-intensive users in
“We have urged to deploy the benefits of fully developed global sectoral agreements and to effectively mitigate the impact of CO2 cost pass-through on EU electricity prices without further delay for industries competing internationally,” they said.
“We are very concerned that, despite previous acknowledgement of these fundamental requirements, the commission does not take upfront a firm stand on free allocation to globally competing industries.”
But Barroso also suggested in his
Industry’s lament is that the EC may not be prepared to take upfront a firm stand on free allocation to globally competing industries. It is also concerned that a decision may be delayed until 2011 when further technical analysis s will be available.
“Such indifference and delay,” the energy-intensive users alliance says, “will send the wrong signals to industry and society of unpredictability and piecemeal legislation”.
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