ECONOMY

EU likely to decide on new CO2 plans in November

BRUSSELS (Reuters) – The European Commission will probably issue its first decisions on member states’ 2008-12 allocation plans for the European Union’s emissions trading scheme in November, a Commission spokeswoman said. «We are looking at November,» said Barbara Helfferich, spokeswoman for Environment Commissioner Stavros Dimas, adding that the timing depended on how fast EU nations replied to any Commission requests for information about the plans. EU states were meant to have submitted the plans by June 30, but most were late. Helfferich said the Commission would decide on October 12 whether to start legal action – known as infringement procedures – against countries that had not yet turned in their plans. Legal action starts with a warning letter and can lead to a case before EU courts. «We hope that they come in soon, very soon,» Helfferich said. «Those who do not submit very soon will be faced with possible infringement procedures.» The emissions trading scheme is the EU’s key instrument to reduce emissions of carbon dioxide (CO2) and meet climate change commitments under the Kyoto Protocol. Under the scheme, governments set limits on the amount of CO2 – one of the greenhouse gases widely blamed by scientists for global warming – that companies may emit. So far, 15 of the EU’s 25 countries have turned in their plans to the Commission. They are Belgium, Britain, Estonia, France, Germany, Greece, Ireland, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Slovakia and Sweden. Helfferich declined to say which plans would be decided on first. By law, the Commission has three months from the date of submission to approve or reject a plan. But the deadline is extended whenever the Commission asks for clarification or more information about the plans. Helfferich declined to say how many countries had been asked for further information. The trading scheme works by allowing participating firms to trade CO2 allowances on a market, buying credits if they overshoot their limits or selling them if they pollute less than they were allowed. The Commission has the authority to accept or reject EU governments’ plans. It is under pressure to be strict with the next round after 2005 data showed most companies had more CO2 credits than they needed, leading to a crash in carbon prices.