2010/10/22

(BN) EU Raises 2013 CO2 Cap by 6% to Account for Aluminum, Chemicals

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EU Raises 2013 CO2 Cap by 6% to Account for Aluminum, Chemicals
2010-10-22 10:18:40.477 GMT


By Ewa Krukowska and Jonathan Stearns
Oct. 22 (Bloomberg) -- The European Union raised the 2013
cap on carbon-dioxide pollution from energy and manufacturing
companies by 6 percent to take account of the entry of aluminum
and chemical makers into its emissions-trading system that year.
The European Commission set the ceiling on CO2 emissions at
2.039 billion metric tons in 2013 compared with a previous limit
of 1.927 billion tons for power plants and factories currently
in the trading program. The system requires companies to have a
permit for each ton of CO2 they emit, with those that exceed
their quotas having to buy more allowances and businesses that
emit less being able to sell their surplus.
The EU decided two years ago to include the chemical and
aluminum industries as of 2013 in the system, the world's
biggest greenhouse-gas market covering around 11,000
installations that produce energy and goods from paper to
cement. The bloc also decided to add airlines as of 2012, a step
that will lead to a further adjustment of the cap in a separate
decision due by the end of this year.
The new cap is set "on the basis" of the EU's goal to
reduce greenhouse gases by 20 percent in 2020 compared with
1990, the commission, the 27-nation bloc's regulatory arm, said
in a statement today in Brussels.
Should the EU decide to deepen its reduction target over
the period to 30 percent, the cap would be lowered, the
commission said.

Climate Change

The emissions-trading program is a cornerstone of EU
efforts to fight climate change, encompassing emitters that
range from utility E.ON AG and oil refiner Royal Dutch Shell Plc
to steelmaker ArcelorMittal and paper producer Stora Enso Oyj.
The system, started in 2005 with a three-year trading period, is
now in a second phase that ends in 2012 and will enter a third
stage running from 2013 through 2020.
The overall supply of allowances over the periods is
diminishing. To calculate its annual emissions caps in the third
phase, the commission uses a linear reduction factor of 1.74
percentage points of the average annual total quantity of
allowances issued in 2008-2012.
The annual cap for installations now in the system is due
to fall by about 11 percent on average in 2013-2020 from 2008-
2012. In 2008, the commission said allowances for those
polluters would decline to an average 1.85 billion tons of CO2 a
year in the eight years through 2020 from 2.08 billion tons
annually in 2008-2012.

For Related News and Information:
Emission market news NI ECREDITS <GO>
Today's top energy stories ETOP <GO>
European power-markets home page EPWR <GO>
Sustainability, environmental indexes SEI <GO>
Client services portal: PRTL <GO>
European economic coverage: TNI ECO EU <GO>
Global statistics: STAT <GO>

--Editors: Jones Hayden, Andrew Clapham

To contact the reporters on this story:
Ewa Krukowska in Brussels at +32-2-237-4331 or
ekrukowska@bloomberg.net;
Jonathan Stearns in Brussels at +32-2-285-4300
or jstearns2@bloomberg.net.

To contact the editors responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net;
James Hertling at +33-1-5365-5075 or jhertling@bloomberg.net.