EU Likely to Block Revised UK Emission Plan - Source
Date: 14-Feb-06
Country: BELGIUM
Author: Jeff Mason
"There's a proposal to reject the plan on procedural grounds," the source said, speaking on condition of anonymity.
Commission environment spokeswoman Barbara Helfferich said the decision was due later this week but declined further comment. "The Commission will take a decision hopefully on Thursday," she said.
The EU's emissions trading scheme sets limits on how much carbon dioxide (CO2), the main gas blamed for global warming, can be emitted by high-polluting factories like power stations and oil refineries.
Companies buy or sell rights to pollute, based on limits that are set by national governments and approved by the European Commission, the EU's executive arm.
Britain ran afoul of the Commission for making changes to its original plan that would allow British industry to pump out nearly 3 percent more C02 in 2005-2007 than first foreseen.
The EU Court of First Instance sided with Britain in the dispute, ruling in November that Britain was entitled to make changes to its plan, even if that meant easing pollution limits for industry.
That revised plan still requires approval from the Commission, however.
The EU source said Britain's proposals to alter the plan in 2004 came after the deadline for changes.
"The additional request came too late," the source said. The allocation plans were required to be finalised three months before the start of the trading period in January 2005, he said, meaning any changes must have been proposed before the end of September 2004.
Britain's proposals came after that, he said.
"On procedural grounds the UK additional request is not acceptable," he said.
The revised plan would allow British companies involved in the scheme to pump out about 20 million tonnes more CO2 over three years.
"Most UK participants have built into their expectations that we won't get this extra 20 million tonnes," a CO2 trader at a British utility said on Monday. "I think it is priced into the market that (these extra quotas) won't arrive."
The emissions trading scheme is the EU's key instrument to meet climate change commitments under the Kyoto Protocol. The EU's 25 member states must turn in a new set of allocation plans to the Commission for the next trading period later this year.
(additional reporting by Margaret Orgill in London)
