Fwd: Enel, RWE Lobbying Delays EU Curbs on Carbon Offsets

Had day off today

Sent From Bloomberg Mobile MSG


Enel, RWE Lobbying Delays EU Curbs on Carbon Offsets (Update1)
2010-11-18 17:28:51.84 GMT

(Adds EIA comment in eight paragraph.)

By Ewa Krukowska
Nov. 18 (Bloomberg) -- The European Union's effort to
restrict imported carbon credits is dragging on because of
"relentless" lobbying by companies including Enel SpA, RWE AG
and E.ON AG, the climate group CDM Watch said.
The European Commission, regulator for the 27-nation EU, is
drafting a proposal to curb the use of United Nations-sponsored
offsets related to industrial gases including hydrofluorocarbons
and nitrous oxide. The commission said they may create windfall
profits for investors and undermine the environmental integrity
of the region's emissions system, the world's biggest.
"Industry is holding the European Commission hostage by
playing different departments against each other," Natasha
Hurley, a Brussels-based policy adviser at CDM Watch, said today
in a statement. "There is a very real danger that its
initiative will be nipped in the bud as a result of cynical
manipulation by corporate investors."
Officials at Enel, RWE and E.ON weren't immediately
available to comment on the CDM report.
UN credits, awarded for investing in projects that cut
pollution in developing nations, may be used for compliance with
the EU cap-and-trade program, which includes more than 11,000
companies. The UN offsets are a less expensive way than EU
allowances for companies to meet emission restrictions.
The commission has indicated plans to present a proposal
this month on restrictions on UN offsets generated by projects
that cut nitrous oxide and HFC-23, which can trap as much as
11,700 times as much heat per molecule as carbon dioxide. The
commission is considering an option to ban such credits from the
use in the EU emissions-trading system as of January 2013.

'Crystal Clear'

The case for a ban on credits linked to HFC-23 and nitrous
oxide from adipic acid plants is "crystal clear," Hurley said.
Italy is defending the use of the credits in Europe,
according to the Environmental Investigation Agency, a London-
based lobby. The nation's government allows 15 percent of its
emissions cap be met with offsets. It holds a stake in two HFC-
23 reduction projects. Enel, a Rome-based utility, has invested
in six projects, according to the group.
"Italy is putting self-enrichment ahead of the common good
and should not be allowed to dictate EU climate policy on the
basis of greed," Fionnuala Walravens, an EIA campaigner said,
in an e-mailed statement.

Ramped-Up Scrutiny

Regulators of the UN Clean Development Mechanism, the
world's second-biggest carbon market, are also ramping up
scrutiny after allegations that some plants with HFC-23
abatement installations may be increasing output simply to
generate credits, handing investors windfall profits. The CDM
executive board plans to decide later this month whether the
methodology for awarding those offsets should be changed.
Concern about the EU proposal was compounded by the UN
decision last week to hand out 871,079 emissions credits to a
HFC-23 reduction project in India, CDM Watch said. This was the
first issuance for such a project since June 2.
The issuance "contradicted previous assurances from the
executive board that issuance for HFC-23 projects would remain
suspended until the board had discussed the methodology panel's
conclusions," CDM Watch said.

For Related News and Information:
Emission market news: NI ENVMARKET <GO>
Today's top energy stories: ETOP <GO>
European power-markets home page: EPWR <GO>

--With assistance from Catherine Airlie in London and Nicholas
Comfort in Frankfurt. Editors: Randall Hackley, Mike Anderson

To contact the reporter on this story:
Ewa Krukowska in Brussels at +32-474-620-243 or

To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net