German Cabinet Accepts EU's CO2 Allocation Plan
Date: 19-Apr-07
Country: GERMANY
Author: Erik Kirschbaum
The EU had asked German industry to apply this limit in the 2008 to 2012 period, rather than 465 million tonnes that Berlin had wanted, as part of its demands on all member states to cut harmful CO2 emissions to protect the climate.
"It's a very ambitious target but it's necessary if we want to reach our aim of reducing CO2 in Germany by 21 percent," Environment Minister Sigmar Gabriel told a news conference. "The first period was too unambitious. It was a learning process."
The 453 million cap for the next five years is 57 million tonnes per year below the allocation for 2005-2007, the first phase. German emissions actually rose last year -- undermining their credibility in the fight against climate change.
Most of Germany's reductions since 1990 are due to the collapse of heavily polluting Communist East Germany industry.
Gabriel said the deal would enable Germany to meet its goal under the Kyoto Protocol to cut greenhouse gases by 21 percent in 2008-2012 compared with 1990. He said it was disappointing that Germany had fallen away from that target in recent years.
"The last period was not ambitious enough," he said. "That led us to fall away from our (21 percent) target in recent years rather than get closer to it. I hope this will now help us get closer to our goals rather than falling away as in the past."
Gabriel said Germany had learned from its mistakes.
"There was a lack of effiency in the first period," he said. "Germany, and other countries, issued more certificates than necessary. We issued four percent too much. As a result, it didn't cost anything to emit more CO2 than necessary."
He added: "We're coming to a point where it's not abstract anymore. The first phase was a test phase. The mistakes made in the first phase weren't really bad. Now it's really started."
Gabriel said he assumed energy producers were making the business calculations now to be ready for the post-2012 period when emissions will be cut even further.
"I assume that those building coal power plants now are fully aware that the emissions allowed will decline further from 2012 and they can calculate for themselves what a further reduction in CO2 emissions will mean economically for them," he said.
Gabriel said a benchmarking system will be introduced to allocate CO2 pollution allowances to emitters on the basis of their energy efficiency.
Modern and highly efficient power stations will be given pollution permits closer to their actual emissions while old and inefficent plants will be given less, forcing them to upgrade equipment or buy additional allowances in the CO2 market.
The system sets incentives on CO2 avoidance by allowing environmentally friendly firms to sell surplus certificates.
There will be separate benchmarks for coal and gas-fired power stations due to the differing intensity of their emissions.
But the final deal does not distinguish between the CO2 intensity of domestic brown coal and mostly imported hard coal after Economy Minister Michael Glos, who had wanted to give brown coal a better deal, struck a compromise with Gabriel.
Brown-coal-biased generator RWE has already complained it will be disadvantaged by the ruling.
(Additional reporting by Vera Eckert in Frankfurt)