EU 2006 Carbon Data Show Emission Targets Too Lax
Europe's carbon market is supposed to curb emissions of the greenhouse gas carbon dioxide (CO2) by handing heavy industry too few emissions permits, forcing them either to clean up or buy extra allowances.
But in 2005, the first year of the trading scheme, countries gave their companies too many permits, and Monday's data suggested the same for 2006, all but confirming the status of the market's first trading period from 2005-07 as an experiment.
To salvage the market's credibility Brussels has taken a tough line with member states for the scheme's second phase from 2008-12, demanding further cuts to 14 out of the 17 proposed quotas it has ruled on so far.
"The problem that we had during the first ... trading period was an overallocation of emissions (permits) as has been shown by the 2005 actual emissions,," said Environment Commissioner Stavros Dimas, ahead of the release of the 2006 data.
"During the second trading period we hope that we shall maintain the necessary scarcity."
Businesses participating in the scheme in Britain and Spain had too few permits in 2006, but Germany, Poland, France, the Czech Republic and the Netherlands all had a surplus.
The EU figures were preliminary, accounting for some 93 percent of all data.
After missing data had been removed, the reported figures suggested emissions under the market in 2006 were 1.84 billion tonnes CO2 versus a quota of 1.87 billion tonnes, or a net surplus of 30 million tonnes.
The EU carbon price for delivery in 2007 was down 16 percent at 1.10 euro at 1145 GMT, versus a carbon price of 17 euros for delivery in 2008, the first year of the market's next phase.
But the 15 countries that joined the European Union before 2004 were still on course to meet their Kyoto Protocol target to reduce their collective greenhouse gas emissions by 8 percent compared to 1990 levels, Dimas said on Monday.
EU-15 greenhouse gas emissions fell 1.6 percent in 2005 versus 2004, Brussels said. However the bloc's two biggest emitters Germany and Britain have both said in recent days that their carbon emissions rose in 2006.