Brussels, 18/12/2012 (Agence Europe) - The European Commission has no hope, by the end of this year, of obtaining an agreement of principle from the Council on its proposal for short term reform of the carbon market, as proposed on 25 July. Poland, which is supported by the countries of Central and Eastern Europe, cannot accept the temporary freeze of 900 million CO2 quotas given the potential adverse impact that this decision would have on those countries' budgetary plans. On Monday, the Polish delegation reiterated this during the Environment Council, on the occasion of a report from the Cypriot Presidency on the state of progress of the dossier, as it had done earlier within the EU committee on climate change. The European Parliament will give its stance on the proposal in March.
Poland, like the other EU countries that have a low GDP, may, as an exemption from the revised ETS directive (Article 10c), grant free quotas to its electricity power plants. It has said that this withdrawal from the quota market is not acceptable as it would deprive it of income at a time when the national budget is already decided for 2013. After the session, Sofoclis Aletraris, the outgoing Council president, conceded that Poland is quite reticent as a number of quotas have already been allocated to the energy sector and subtraction of quotas would restrict its budgetary income. However, he said, a large number of member states have supported the proposal. Connie Hedegaard, Commissioner for Climate Action, says that Poland cannot have its cake and eat it too. She told the press: “One cannot at the same time decide on free allocation under the derogation and also be worried about not having received enough in income! It is one or the other”. Poland fears that the Commission will do what it wants on the market throughout the whole period of trade. On the sidelines of the session, Polish senior officials said (our translation): “For the countries that are authorised to allocate free quotas, there will be an adverse effect. Germany, which does not have a transitional period, will earn €400 million, while Poland will lose €1 billion”. (AN/transl.jl)