Germany chems, others slam plan to change EU emissions trading system

25 July 2012 17:06  [Source: ICIS news]

LONDON (ICIS)--Germany’s chemical producers and other energy-intensive industrial firms in the country fear that plans to change the EU Emissions Trading System (ETS) will hurt their international competitiveness, they said on Wednesday.

They were reacting to a proposal by EU Climate Action Commissioner Connie Hedegaard that could, if realised, reduce the number of emission allowances, thus raising their prices.

Hedegaard said that the ETS market built up a growing surplus of allowances over the last few years.

“It is not wise to deliberately continue to flood a market that is already oversupplied,” she said.

However, a coalition of German energy intensive industrial producers, including Frankfurt-based chemical trade group VCI, said there was no reason to intervene in the ETS market.

While prices for ETS emissions permits were currently low, the market was working exactly as it should, said Martin Kneer, the coalition’s spokesman.

The objective of emissions trading was to achieve climate protection targets in the most economical way possible, and that was why the EU had decided against a carbon dioxide (CO2) tax but rather opted for a market system, Kneer said.

The Commission now wanted intervene in the market to artificially raise the prices of emission allowances, Kneer said.

“Such an intervention into the market system is legally problematic, and it would deviate from the European climate protection targets,” he said.

In the absence of a global climate protection deal, European-based industries could loss market share, and jobs, to countries with lower climate protection standards if the Commission’s proposal is realised, he said.

The ETS covers about 11,000 industrial installations and 45% of the EU's emissions. From this year, aviation is also included in the ETS.

By: Stefan Baumgarten
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