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Italian emitters to be reimbursed for EUAs

05 May 2010 14:53:15 | edcm

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The Italian Council of Ministers has passed a measure to reimburse energy and industrial companies that had to buy EU allowances (EUAs) for plants that opened after April 2009.

The cabinet approved the law on Friday - the EU deadline for companies to surrender allowances matching 2009 emissions.

Trade association Confindustria said it was satisfied the government had remedied the problem, as the industry faced a shortage of some 40m-45m tonnes of carbon dioxide equivalent (tCO2e) for new entrants for the 2008-2012 period.

"The government accepted the urgent appeal made by companies these past few days, and reached - even though it was at the last minute - a solution needed to guarantee that companies could continue to operate," the group said.

The measure allows companies (including power majors Enel and Sorgenia) to receive EUAs for their new power plants without shifting the costs onto consumers, according to Italy's Ministry for Economic Development (Mse).

The announcement did not detail how the reimbursement procedure would work, and the ministry was not available to comment when contacted. However, opposition parties have suggested that the government plans to use auction revenues from Phase III to plug the industry financial hole.

Francesco Ferrante, a senator from the centre-left Democratic Party, said: "It goes against the EU's fundamental principles to think that they can use resources from the auctions after 2012, which should be used for programmes that are aimed at reducing emissions, to allow polluters to emit greenhouse gases without having to even pay the price."

The question of how the Italian government would account for its shortfall in the new entrant reserve (NER) has become increasingly pressing in recent months.

The environment ministry allocated its last remaining 21.74m tCO2e of the NER in the 2008-2012 period on 29 April - the day before the deadline. The government, however, needed a total of 56m tCO2e to cover requests from more than 500 companies. SS

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