04 July 2013 14:45 [Source: ICIS news]
LONDON (ICIS)--France’s chemical industry trade group expressed concern on Thursday that the proposed freeze of carbon dioxide (CO2) emission allowances in Europe’s Emissions Trading System (ETS) will further drive up energy costs for chemical producers.
Union des Industries Chimiques (UIC) was responding to a vote this week by the European Parliament in favour of "backloading" - the freezing of auctions for some CO2 permits on the ETS in order to support prices.
UIC said that backloading would increase the cost of energy to chemicals and other industrial producers in France and elsewhere in Europe.
"Firms are already suffering from a lack of competitiveness, especially because natural gas costs in the US - where shale gas is being produced - are three to four times lower," the group added.
"The only sustainable way to raise the price of [ETS] carbon allowances is to reindustrialise Europe," said UIC director general Jean Pelin.
A glut of ETS greenhouse gas emission allowances, caused by oversupply and the economic slowdown, has seen the carbon price fall far below levels forecast at the time of the creation of the ETS in 2005.
Additional reporting by Will Conroy
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