Brussels, 25/02/2008 (Agence Europe) - The 27 EU ministers meeting in the Competitiveness Council say that it is imperative that the EU leads from the front in combating climate change, but it must do so without harming the competitiveness of the European economy. There was general agreement on the need for a balance between these two requirements in discussions on the climate-energy legislative package over lunch on 25 February. Then, they held a preliminary assessment of the proposals presented by the Commission on 23 January (see EUROPE 9586).
Although competence on this issue lies mainly with the Environment and Energy Councils, which is due to hold its first general discussions on 28 February (Energy Council) and 3 March (Environment Council), Economy and Industry Ministers want to have their say on this matter - as is required by the objectives of the Lisbon Strategy. It was, moreover, with regard to EU growth and jobs targets that 7 ministers of this Council (those of Austria, France, Germany, Luxemburg, Finland, Hungary and the Czech Republic), on 15 February, informed the Council and the Commission of their concerns on the possible impact of unilateral EU measures on European competitiveness. They fear that they will have to wait until 2011 to find out what will happen, in 2013, to energy intensive industries in terms of the emissions trading scheme (were there to be no international agreement on a post-2012 scheme to combat climate change) and so that an assessment can be carried out of the appropriateness of a border compensation mechanism for products imported from third countries which did not have binding targets for greenhouse gas emissions after 2012 (see EUROPE 9607).
Speaking to press, French Secretary of State Hervé Novelli said that the fact that the Competitiveness Council had considered this issue “shows how important it was to note that the European position has to be balanced: showing the example in combating climate change but not affecting our competitiveness, and particularly that of our industry, but failing to take account of these parameters could lead to relocations if we are not careful”. The letter from the seven signatories informed discussions and “Commissioner Verheugen was very receptive”, Novelli acknowledged. “I restated the interest there would be in having an adjustment mechanism at the borders because our industries must not be penalised compared with imports which are not subject to the same constraints and which, therefore, are more polluting,” he added.
Other delegations stressed international sectoral agreements on emissions reductions to preclude the need for such a mechanism (this is one of the three options envisaged by the Commission). “We are still some distance from such agreements and there is consensus on the need to act before 2011,” Novelli said.
Speaking about energy intensive industries, “which must not be excessively penalised by the rise in energy prices”, the French Secretary of State denounced the paradox which sees the Commission about to condemn the state aid granted to these industries which receive support precisely because they are energy intensive. On behalf of Italy, Vicenzo Grazzi, deputy permanent representative, went as far as to describe this paradox as “schizophrenic”. The debate has only just started on this issue. The Council will go to the heart of the matter on 28 February. (A.N.)