EU members accused of abusing ETS

May 15, 2006 02:00 AM

Politicians and environmental groups have publicly condemned the EU's Emissions Trading Scheme (ETS) as being too lenient.
Results of the cap and trade carbon dioxide emissions scheme's first year in operation were published and many parties have voiced concerns over how seriously the scheme is being taken.

The UK's environment and climate change minister, Ian Pearson, said: "While the system appears to be functioning effectively, the results across the EU do raise questions about the stringency of the caps in some Member States."
Matthias Duwe, director of Climate Action Network-Europe, was stronger in his criticism: "European governments have blatantly ignored the aims behind the ETS and abused the trading scheme."

According to a joint statement released by WWF, Climate Action Network, Friends of the Earth Europe and Greenpeace, the first annual results of the scheme show that actual emissions of installations covered by the ETS in 2005 were several mm tons below the granted permits.
The statement reads: "Data from member states such as Germany, France, the Netherlands, Sweden and Lithuania show that generous emission allowances granted to companies are causing the decline in carbon prices and distorting the market. This also reduces the credibility of the EU Emissions Trading Scheme."

Under the scheme, installations that emit more carbon dioxide than their allocation need to buy allowances to cover extra emissions, and installations that emit less are able to sell allowances. The limits of the project's second phase are currently being discussed as well as alternative solutions. Pearson said: "I will be encouraging the Commission to use this information to improve the enforcement of tough caps for Phase II so that the scheme provides the appropriate incentives for investment in clean technology."

Phase I of the scheme is scheduled to finish at the end of 2007.
Phase II will then run from 2008 to 2012, the year Kyoto expires.

Source: Power Engineering Magazine
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