Brussels, 24/01/2008 (Agence Europe) - Awaited with trepidation, the energy-climate package unveiled by the European Commission on 23 January (see EUROPE 9586) has been better received than expected by those who feared measures that were too binding and would harm European competitiveness. All have their own reservations, but the relative moderation of the criticism before inter-institutional negotiations on the legislative texts begin seems to suggest that the efforts made in search of balance and necessary compromise have been well received.
The Council Presidency immediately welcomed the fruit of huge amount of work carried out in close collaboration with member states, the aim of which was to transform Europe into a both low-carbon and highly energy efficient economy. Noting that the EU had led the way in the UN Bali conference in December, the Presidency said that the EU now had the “responsibility” to continue in the same way. “For the EU to continue to take the lead in tackling climate change, facing up to the challenge of secure, sustainable and competitive energy, we need to take decisions on the key elements of the package. This would send a clear signal to industry, researchers and consumers … (and) create a stable and predictable environment for investors and researchers in the sectors of energy and the environment,” the Presidency said, counting on a “constructive approach and support of the Member States and the European Parliament” leading to final adoption of the package by spring 2009 at the latest. At stake is Europe's credibility, the Presidency said, certain that the time for energy and environmental nationalism was over. Climate change, it said, was not just a threat, it was also an opportunity to grab.
Revised ETS must be accompanied by compensation measures, warns industry
While stating support for the target of a 20% reduction in greenhouse gas emissions by 2020, BusinessEurope is critical of the uncertainty which will remain until 2010 on the conditions under which companies will have access to free allowances in the Emissions Trading Scheme (ETS) and believes that the enhanced ETS combined with ambitious objectives in renewable energies will have, “strong direct and indirect impacts on energy-intensive industries, which play a key role in eco-innovation”. It regrets the severe restrictions on the use of credits generated by the Clean Development Mechanism (CDM) and the JI (Joint Implementation) projects. It says that the threshold to opt out of the Emission Treading Scheme for small installations is too low and should be raised to 25,000 tonnes/year of emissions.
The UEAPME supports the strengthening and expansion of the ETS but insists that it is accompanied with measures to compensate foreseeable losses in certain industrial sectors, so that the renewed ETS is not a burden to SMEs. The International Association for Heating and Cooling (EUROHEAT AND POWER) considers that the gradual move to trading must absolutely avoid discrimination between the actors within or without the ETS. It is calling for an allocation of free allowances on the basis of benchmarks guaranteeing equal treatment. Speaking on behalf of the chemical industries, the CEFIC is highlighting the need for an ETS that preserves, a competitive edge in the whole sector so that it can continue to provide innovative solutions to the whole of industry, given that the low carbon economy cannot be achieved without the chemical industry. With regard to the auctioning of allowances, Director General Alain Perroy said that, while awaiting an international agreement that would guarantee competition conditions that would see everyone on the same footing, the provision of free permits, along with a benchmarking system, was the only satisfactory option, so as not to penalise technology leaders. The chemical sector was already working to establish this high standard of performance which would take account of emissions levels and available technologies and would bring forward a proposal by the end of the year, he said.
The European Trade Union Confederation (ETUC) also argued for a system of free allocation according to the benchmarking principle and of auctioning of permits, on condition that, in determining how big each part is, account is taken of the impact on European workers. The ETUC was critical, however, that the Commission, while acknowledging the risk of relocation and carbon shift to countries which refused binding emissions reduction targets, was happy to contemplate only a compensation mechanism at the borders, rather than a carbon tax on imports which would even out carbon costs for companies inside and outside Europe. Post Europe, the European public postal operators association, reiterated its support of the EU targets on reducing greenhouse gases and said that, as a key sector in the European economy, the postal sector was committed to showing an example, working closely with customers, suppliers and stakeholders to reduce its impact in Europe and throughout the world. (A.N.)