Positive Environment News

German industry slams EU emissions trading plan

Date: 29-Aug-01
Country: GERMANY

Emissions trading - buying and selling the right to pollute - is one of the measures suggested by the UN-sponsored deal agreed in Kyoto in 1997 to help industrialised countries cut greenhouse gases (GHGs) linked to climate change.

The Commission is working on a draft emissions trading directive, which it aims to present by the end of the year.

"We have been formally involved (in talks), but none of the industry's comments have been taken into account in the EU's draft directive on emissions trading," Eberhard Meller, head of the association of German power suppliers VDEW, told delegates at a Euroforum conference in Frankfurt.

Germany's own emissions trading working group aims to present a model for carbon dioxide (CO2) emissions trading by September and put a draft law before parliament in December.

CO2 from fossil fuel combustion is the easiest of the six GHGs to monitor and accounts for 87 percent of them. It is thus the most suited to start off trading, said the Environment Minstry's Franzjosef Schafhausen, who heads the working group.

An outstanding issue in the EU's plan, the Commission's Peter Zapfel said, is whether participation in emissions trading should be mandatory or voluntary.

German industry opposes a mandatory company-based approach as running counter to its existing voluntary commitment to reduce CO2 emissions and insists a global country-based scheme would offer greater incentives to participate.

Christof Bauer of German chemicals firm Degussa dismissed Schafhausen's warning that companies that do not participate in trading could face an increase in Germany's existing eco-tax, while those that do could have it removed.

"Why should I have to make a choice between the devil and the deep blue sea? Maybe I am bit behind the moon, but I don't see any dirty dealing like that happening," he said.

There is a stark contrast in the working group, industry sources said, between the environment ministry, which supports the EU-wide company scheme and the economics ministry and a large part of industry that want a country-based system.

"We prefer an EU-wide company based scheme because it will mean a cost saving of one third compared with implementing emissions trading on a national level," Zapfel said.

But Joachim Hein, of industrial consumers group BDI, argued that Kyoto itself calls for national emissions caps.

"ET at a company level would ruin the Kyoto Protocol in fact, since international industries fear they will have to comply with state-of-the-art technologies, or be punished."

Degussa's Bauer added that, with a company scheme, international companies would simply move their emissions to countries where it was cheaper to emit

VDEW, BDI and Degussa said they want to be allowed to work with the "current tool kit" - the voluntary commitment, eco tax and laws designed to support combined heat and power (CHP) generation and the use of renewable energies.

The government agreed with industry in June to target a 23 million tonne cut in CO2 by 2010 through CHP use, as part of a total 45 million tonnes/year reduction target.

"This is not a one-way agreement - the federal government guaranteed it will not try to take any regulatory steps to achieve these voluntary targets," VDEW's Meller said.

The associations and Degussa called instead for a "test phase" of voluntary participation in emissions trading.

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