Brussels, 10/12/2008 (Agence Europe) - On the eve of the European Council of 11 and 12 December, every calculator in Brussels and the European capitals is being deployed to give the Heads of State and Government a chance to fill the large number of blanks in the draft conclusions, on the "Climate/Energy" package. Because although Nicolas Sarkozy and José Manuel Barroso are calling on the 27 to show flexibility and solidarity with a view to reaching a political compromise which keeps in place the fundamental balance and ambition of these legislative measures (EUROPE 9800), the fair division of the costs of the package must be translated into figures in black and white. This concern should steer work on the finalisation of the draft conclusions on Wednesday evening, in the hope of paving the way for a first-reading EP/Council agreement before the end of the year.
The outstanding questions which will be put to the arbitration of the Heads of State and Government are limited in number, but not in their technical complexity. For the proposed directive on the revised ETS, which aims to reduce emissions from industry in the EU by 21% by training in emissions permits, these relate to:
the duration and scale of the interim derogations for the auctioning of 100% of paying quotas in the energy sector for the electricity companies of certain Member States: the 27 must agree on the date and minimum auction rate to start from, and the date for 100% auctioning of permits. It is worth noting that the paying quotas aim to counter unfair profits made by the electricity companies during experimental phase of the system;
the mechanism of solidarity, by means of the redistribution of part of the auction revenue to the new Member States by way of economic catch-up: should the figure decided upon be more than the 10% envisaged, as called for by Poland, Bulgaria, Romania, Hungary, Lithuania, Latvia, Slovakia, whereas the United Kingdom and Germany feel that this percentage is too high and would prefer to see redistribution by the EU budget? It is worth noting that this solidarity mechanism is not planned only for the new Member States, but would benefit 19 of the 27 countries, including seven of the "old" Member States, on the basis of criteria such as the GNI per head of population and their high growth potential).
The criteria to establish the list of industrial sectors exposed to the risk of delocalisation, or a kind of "carbon drain", if there is no Copenhagen Agreement in December 2009 on the global regime fight against global warming after 2012. A consensus must be found on the targeted figures related to these two criteria (the intensity of non-community trade and costs due to the auction sales).
The level of the auction sales for industry sectors not exposed to the risk of "carbon drain".
The pre-allocation of auction revenue: the Heads of State and Government must agree on the terms of a declaration translating the political will of the European Council to use the auction revenue for the fight against climate change;
the total of allocations of quotas to pay for the 12 major projects for the capture and geological storage of carbon (CSC): this issue is directly related to the proposed directive aiming to provide a legal framework for the CSC to encourage this technology in full respect of the environment.
For the proposed directive on the division of efforts between the Member States for sectors not covered by the ETS (agriculture, construction, transport) aiming to reduce by 10% of greenhouse gases emissions in the EU (compared to 2005 figures), with national objectives varying between -20% and + 20%, the questions to be resolved are as follows:
the level of use to be made of the clean development mechanism (CDM) providing entitlement to emissions credits for investments made in developing countries;
the tax relief factor to determine the reduction of the emissions made, year on year, in the Member States which exceeded their target the previous year. The formula currently on the table currently makes provision to ensure that the objectives are being observed, instead of the financial penalties called for by the Parliament (the Parliament is proposing a rebate factor of 1.3, whereas the Council can only accept a factor of 1, giving a reduction strictly compensating the amount by which the objective was exceeded).
Corrections to the trajectory for the Member States with positive objectives, to allow them to increase their emissions from 2009 (an error in the initial text of the directive would have obliged them to reduce their emissions between 2009 and 2013 before being allowed to increase them).
On tackling the risks of "carbon drain", the French Presidency took pains to make it clear to the Member States that the allocation of quotas, free of charge, to certain industrial sectors, is not an escape clause, as the standard for granting the gratuity- 10% of the most efficient installations of the EU- is "highly ambitious", said a diplomat. For emissions exceeding this benchmark, quotas must be bought. Will this be enough to mollify the concerns of countries such as Poland, which fear that the money available for solidarity between the rich and the less-advanced countries of the EU could melt away? The European Council have the answer. (A.N./trans.fl)