Still no consensus in sight on EU climate plans

2639, 20/10/08

EU environment ministers meeting in Luxembourg on Monday began scrutinising the details of plans to reduce the bloc's greenhouse gas emissions by 20 per cent by 2020 but no consensus on key issues seemed in sight.

The ministers held in-depth discussions on how to identify and protect industrial sectors at risk of carbon leakage under plans to revise Europe's emission trading scheme (ETS), and how a "solidarity mechanism" recognising challenges faced by eastern European countries should be set up.

French environment minister Jean-Louis Borloo emphasised that the basic architecture and timeline for agreeing the European commission's package of measures on climate change and energy are supported by all EU member states (EED 16/10/08 http://www.endseuropedaily.com/26371).

EU states want quantitative and qualitative criteria to identify sectors at risk of carbon leakage written into the revised ETS directive.  Germany wants to include the exact thresholds defining exposure categories in the law but most government do not support this, ENDS understands.  The commission wants to set these thresholds through the EU's comitology procedure.

But many countries back a German proposal to give exposed industries 100 per cent free carbon allowances until an international climate agreement imposes similar carbon costs on competitors outside the EU. German environment minister Sigmar Gabriel told journalists the commission's proposal to identify at-risk sectors in 2010 was "completely unacceptable".

Eastern European countries still want more recognition for reductions in greenhouse gas emissions achieved since 1990.  The commission says 2005 is the earliest year for which accurate emissions data is available (EED 05/06/08 http://www.endseuropedaily.com/25571).

These countries also reiterated their call for a more generous solidarity mechanism (EED 04/07/08 http://www.endseuropedaily.com/articles/index.cfm?action=article&ref=25781). The commission proposes to redistribute 10 per cent of ETS carbon allowances auctioned by EU governments to help the bloc's poorer countries.

Another aspect of the solidarity debate is access to international carbon credits from Kyoto's flexible mechanisms.  The more outside credits are let in, the less opportunity there will be for eastern European countries to sell the spare allowances many expect to have.

Inter-member state trading is seen as a way of improving solidarity. Most ministers did not support MEPs' call to set aside 500m carbon allowances from the EU carbon trading scheme's new entrants reserve to co-finance the construction of carbon capture and storage demonstration plants (EED 07/10/08 http://www.endseuropedaily.com/26302).  Hungary spoke out strongly against this.  Only the UK and Netherlands publicly backed the proposal.

Follow-up: EU council of ministers http://www.consilium.eu.int/en/summ.htm, tel: +32 2 285 6211

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