Firms attack emissions trading scheme

Date: 28/09/00

By Renée Cordes

SOME of Europe's most powerful trade associations are fighting European Commission attempts to limit the scope of an experimental greenhouse-gas emission trading scheme due to start in 2005.

In a Green Paper adopted earlier this year, environment chief Margot Wallström outlined a number of possible ways to regulate the system under which industries will be allowed to buy and sell the right to pollute.

The EU is currently struggling to meet the commitment it made at the 1997 Kyoto climate change conference to reduce emissions of six key greenhouse gases. Emissions trading, one of the flexible mechanisms which can be used to meet the Kyoto targets, is based on the principle that it does not matter where reductions are made so long as the overall goal is reached. The Union promised to curtail emissions of six gases to 8% below 1990 levels by 2012, but is in danger of falling far short of this objective.

Under the Commission's plan, firms in six of Europe's heaviest-polluting sectors would be given overall targets for reducing emissions. These industries, which include thermal power stations and iron, steel and chemical producers, account for nearly half the EU's carbon dioxide emissions.

Firms which achieved better-than-expected results would be allowed to sell their 'credits' to others struggling to stay within their quotas. The aim of the pilot project is to make it easier for the Commission to judge the effectiveness of the system and give the Union more time to fine-tune its strategy before international emissions trading is introduced, probably in 2008.

But policy-makers are under pressure from a number of industry groups - including European employers federation UNICE, chemical lobby group CEFIC and European cement association Cembureau - to expand the scheme to other areas.

They argue that would be unfair to impose targets on certain sectors and not others, and have urged officials to extend the system to all industries which emit greenhouse gases, maintaining that this will reduce the overall cost of combating climate change. "Of course the chemical industry will play its part, but you have to look at other sectors such as transport and households in order to be truly effective," said Bertil Heerink, head of CEFIC's environment division, who added that his sector accounted for only 15% of Europe's total carbon-dioxide emissions.

CEFIC also believes that the Commission should not restrict the scheme to CO2 emissions, but should instead include all greenhouse gases provided they are properly monitored.

All three organisations insist that any trading regime must be transparent and flexible. They are calling on the Commission to allow companies to trade emissions internationally and to ensure that the EU scheme is compatible with other similar regimes around the world.

Some of Europe's most powerful trade associations are fighting European Commission attempts to limit the scope of an experimental greenhouse-gas emission trading scheme due to start in 2005.