Horsens, 18 avril 2011 (Agence Europe) - At the informal Environment Council in Horsens (18-19 April), which on Thursday will debate the necessary reform of the EU's emissions quota trading system (ETS), Poland will say “Nie” to the planned reform of the ETS. A political document distributed by the Polish minister, Marcin Korolec, to all of his colleagues the day before the session reveals that Poland is opposed to any attempt on the part of the EU to intervene to increase carbon prices via a reform of the ETS, on the basis that once economic recovery is in place, prices will naturally rise and that the objectives of the Energy/Climate package concluded in 2008 are being achieved. Poland, which depends on coal for 90% of its electricity production, fears that any intervention to boost the price of a tonne of carbon could threaten the security of its energy supply (a transition to gas, which is less polluting, would increase its dependency on Russia) and hinder its economic growth if certain high-energy intensity companies were tempted to relocate to Russia or Ukraine.
Warsaw does not feel that the record low price of €7 for a tonne of carbon (see EUROPE 10588) is too low and will not hear of a minimum price, a freezing of quotas for the third trading period of the ETS (to start in 2013) or more ambitious emissions reduction targets than those agreed in 2008.
“The ETS requires adjustments, but this is not due to excessively low CO2 prices. The fact is that we are achieving our 2008 objectives at a lower price than initially anticipated. This does not mean that our reduction efforts were cheap; far from it. The European economy is in torment and it is the nature of a market instrument to reflect the underlying economy”, the Polish document stresses (our translation).
Nonetheless, Poland makes a number of suggestions for improvement. Rather than freezing quotas, Poland proposes that the option be offered to countries with AAUs (surplus quotas described as “hot air” quotas) as a result of veritable efforts to reduce emissions to use them to fulfil their commitments under the Kyoto Protocol. It also suggests that the “benchmarking” governing the allocation of free quotas to 10% of businesses using the most efficient technology in their sector should be based not only on the type of products, but also on the type of energy used to produce them (which would make it possible to avoid penalising coal). In view of the tension caused by the extension of the ETS to civil aviation, with repercussions on third countries, Warsaw is proposing an exploration of the reduction potential of the whole of the EU transport sector, taking account of both reductions of emissions arising from production as well as those caused by consumption. Poland also takes the view that third countries should be invited to link their instruments to fight climate change to the ETS in order to increase its base and stabilise it, and to allow the EU to keep hold of its leading role in international negotiations. It will be up to the environment ministers of the EU27 on Thursday to define informally the details of the reform of the ETS, which the Parliament is calling for in order to restore its vocation of providing an incentive to green investments - a reform which the European Commission is planning to prepare, in the form of a legislative proposal. (AN/transl.fl)