France, Germany to halt emissions 'speculation'

15th May 2006, Comments 0 comments

PARIS, May 15, 2006 (AFP) - France and Germany are to ask the European Commission to modify environmental legislation underpinning the EU's emissions trading market, French Industry Minister François Loos said Monday.

PARIS, May 15, 2006 (AFP) - France and Germany are to ask the European Commission to modify environmental legislation underpinning the EU's emissions trading market, French Industry Minister François Loos said Monday.

The governments are concerned that costs associated with the system, which requires European companies to buy permits for their excess emissions of carbon dioxide, will feed through into the price of electricity for consumers.

Electricity producers believe that the cost of the permits will make electricity more expensive and instability of prices for permits makes long-term investment more difficult to plan.

The initiative of France and Germany is open "to all countries that would like to join", Loos said at a press conference here.

Loos said he would present a plan to the commission to change the French permit allocation system, allowing France to distribute more CO2 permits in the event of what the minister termed a "speculative bubble".

Under the EU scheme, more than 9,400 industrial plans are attributed CO2 emission quotas, with one allowance giving the right to emit one tonne.

The aim of emissions trading systems is to generate incentives for companies to reduce their emissions and impose costs on those that are less efficient.

Plants that emit less than their quota, for example by investing in green technology, can sell the surplus allowance on the emissions market to companies that pollute more.

Figures from the European Union's executive arm showed on Monday that EU industrial plants pumped out 1.785 billion tonnes of CO2 greenhouse gases into the atmosphere in 2005 while national authorities had given them allowances for 1.829 billion tonnes.

Environmental groups seized on the figures as evidence that EU governments had attributed too many allowances to undermine the programme.

In late April, the market fell 35 percent in a single day to EUR 15 for a tonne of CO2 emissions after the publication of figures from the Belgium, the Czech Republic, Estonia, France, the Netherlands and Spain.

Copyright AFP

Subject: French news

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