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German power firms want emissions trade exemptions

Date: 09-Dec-02
Country: GERMANY

"Contrary to general optimism that Germany has won all the concessions it has demanded in exchange for its approval of the EU directive, one point is still unclear," VDEW's managing director Eberhard Meller told Reuters.

"It concerns the right of industries to opt out of the mandatory scheme in the period running to 2007, not just the right of individual installations, and we need this assurance rather than having to start trading in 2005."

After much infighting, the red-green coalition government of Germany, Europe's biggest emitter of "greenhouse gases," said earlier this week it had agreed with the Commission that Germany would back an EU emissions trade law from 2005, which environment ministers will decide on Monday.

The law will be the EU's main motor for achieving the eight percent cut in greenhouse gas emissions over 1990 levels it has to reach under the global Kyoto Protocol by 2012.

It will set a limit on the amount of carbon dioxide that can be emitted by any big factory or power plant, after which it has to buy extra pollution rights from low emitters, or be fined.

Meller said that Germany had initially opposed the EU scheme because it had already reached 19 percent of emissions savings of a total voluntarily targetted 21 percent over 1990 levels by 2010 under a national industry deal.

It had feared the pan-EU deal would put further burdens on companies, but had decided to join in with the rest of the bloc because the long introduction times - until 2007 - would allow firms time to adjust.

Separately, Meller put a question mark on the effectiveness of the right German was granted for its industries to form collective pools to do the emissions trading, rather than each company having to buy and sell emissions individually.

"This could create problems if only those companies with no rights to sell clubbed together while those which have cut emissions sold their pollution rights in the marketplace," he said.

"The trading system wouldn't work and the EU could then force companies to subject themselves to the trade regime."

VDEW represents 750 power companies representing 90 percent of German output.

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