MEPs want phased-in emission permits auctioning

07 October 2008 13:24  [Source: ICIS news]

PARIS (ICIS news)--Energy-intensive sectors, such as the chemicals industry, vulnerable to international competition should be offered phased-in auctioning of emissions permits, said members of the European Parliament’s (EP) environment committee on Tuesday.

 

Instead of receiving their allowances for free, energy-intensive participants in the EU ETS should have to buy 15% of their allowances in 2013 under the so-called "auctioning" process and should be subject to full auctioning by 2020, agreed MEPs during a vote on how to shape the EU emissions trading scheme (EU ETS) after 2012.

 

The suggestion to phase-in auctioning - rather than force energy-intensive businesses to buy the majority of their allowances from 2013 as will be the case for other industries - will win some support from the chemical industry, though it has remained set against full auctioning at any time in the future.

 

“We are against full auctioning because we will not be able to pass on those additional costs to our customers,” said Francois Cornelis, the outgoing president of the European Chemical Industry Council (Cefic), before the vote.

 

 “We propose a system of benchmarking where producers are supposed to reach a certain level of performance and are credited for performing better than the benchmark and penalised for performing worse than the benchmark,” he added.

 

The committee also voted to reduce the amount of carbon offsets - generated from emissions-cutting projects in developing countries - that member states can use to meet their national greenhouse gas emissions (GHG) targets after 2013.

 

They said member states should be allowed to import offsets up to the equivalent of 8% of their 2005 emissions for the period from 2013-2020. This means EU states will have to take more domestic action to cut emissions.

 

MEPs also voted to give member states more flexibility to trade their EU emissions quotas among themselves. Member states that undercut their GHG targets may then sell the excess quota to others struggling to meet their targets.

 

Countries that exceeded their quotas should be fined per tonne of extra GHG and the European Commission should likewise take control of their national levies from selling emissions permits to industry, said MEPs.

 

The vote is not the final word but will set the tone for negotiations with national leaders ahead of a final agreement later this year or early in 2009.

 

The EU ETS is a Europe-wide scheme which aims to reduce carbon dioxide (CO2) emissions and combat the serious threat posed by climate change.

By: Philippa Jones
+44 20 8652 3214

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