EU CO2 Plans For 2008-12 "Ambitious Enough" - Piebalgs
Date: 24-Aug-06
Country: NORWAY
Author: Simon Webb
Asked if the carbon price could collapse from 2008-12, given a market concern that plans submitted so far were too lenient, he said:
"At least what we have seen so far they (phase 2 plans) have been ambitious enough. Definitely we shouldn't expect a collapse in the carbon price." So far Estonia, Germany, Ireland, Latvia, Lithuania, Luxembourg, Poland and Britain have submitted plans.
In particular the east European countries Estonia, Poland and Latvia have posted big proposed increases in carbon credit quotas, as well as Luxembourg.
The EU trading scheme works by giving heavy industry a certain quota of carbon credits allowing them to emit heat-trapping carbon dioxide up to a certain limit -- if they they undercut the limit they can sell the credits surplus, and if they exceed it they have to buy more.
The scheme is the cornerstone of the EU's climate change strategy and is supposed to drive greenhouse gas emission cuts by giving firms too few credits.
But the market suffered an EU-wide credits surplus in 2005, attributed to lax emissions targets and drawing heavy criticism from green groups.
The European Commission has since acknowledged that there was an over-allocation of credits in the first phase of the scheme from 2005-07 and promised to be tougher on phase 2 plans.
When asked when the European Commission would formally respond to the 2008-12 carbon emission plans submitted so far Piebalgs said:
"I think as soon as possible we'll come up with our conclusions, in the next month or so. As far as I'm informed... we shouldn't expect big delays."