Commission slashes Polish and Czech carbon quotas

Europe has slashed the carbon allocations proposed by the Polish and Czech governments for the second phase of the EU Emissions Trading Scheme in an effort to avoid over-generous allowances that have crippled the ETS previously.

Poland was hardest hit, with the annual 284,6m-tonne quota it wanted to offer its industry for the 2008-12 period slashed by 26.7% to 208,5m tonnes. The Czech Republic's annual emission cap was set at 86.8m tonnes - 14.8% lower than what it had asked for.

Environment Commissioner Stavros Dimas said that the countries' current and projected carbon emissions do not justify such high quotas. As it rejected Polish and Czech proposals the Commission approved French proposals unmodified, allowing France to emit 132,8m tonnes a year. Allocations proposed by the UK government - 246,2m tonnes a year - also passed with no changes.

"The European Commission has assessed the Czech and Polish allocation plans in the same fair and consistent way as we are assessing all others," Stavros Dimas said.

"Our decisions are based on Member States' verified emissions in 2005, give credit for projected economic growth and take into account expected improvements in carbon intensity,"

"Today's decisions are of vital importance to create the necessary scarcity in the European carbon market and make the Emissions Trading Scheme a successful weapon for fighting climate change."

Allocations for the previous period under the ETS proved too generous, making the price of credits plummet.

Monday's decisions bring the number of allocation plans the EC has ruled on to 17. Germany, Slovakia and Latvia have also seen their proposed allocations reduced, but the Polish cut is one of the biggest in the EU.

"Our proposed annual allocation limit took into account both the current level of CO2 emissions and Poland's predicted economic growth as well as the fact that 96% of Polish electricity comes from coal-fuelled power stations," said Barbara Helfferich, spokeswoman for Commissioner Dimas.

"For the emissions trading scheme to work, we must make sure that demand for allocations is greater than supply. Only then will companies finally start to prepare pollution reduction strategies," she said.

Goska Romanowicz



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