comments our way
+------------------------------------------------------------------------------+
Europe Will Agree to Curb UN Emission Credits (Update1)
2010-10-15 09:34:38.452 GMT
(Updates with comments from Belgian climate minister in
eighth paragraph.)
By Jonathan Stearns and Ewa Krukowska
Oct. 15 (Bloomberg) -- Europe's climate chief predicted
victory for a push to limit imports of emission credits based on
industrial gases, a step that may raise costs for polluters such
as RWE AG and Enel SpA in the world's biggest greenhouse-gas
market.
European Union Climate Commissioner Connie Hedegaard said
EU nations will likely support planned curbs on foreign credits
that energy and manufacturing companies can use as emission
permits in Europe's cap-and-trade system. The imported credits,
generated under a United Nations program to spur energy-
efficient projects in developing countries, are cheaper than EU
allowances and can be swapped one-for-one with them.
The European Commission, the EU's regulator, intends in
coming weeks to propose extra "quality" conditions in Europe
for UN credits awarded for tackling emissions of a
hydrofluorocarbon called HFC-23, which is a by-product of HCFC-
22 used in air-conditioning and refrigeration. Hedegaard is
concerned that overseas plants may be increasing HCFC-22 output
simply to generate credits for controlling HFC-23 discharges,
handing investors windfall profits.
"Everybody realizes that something has to be done,"
Hedegaard told reporters yesterday in Luxembourg after she met
environment ministers from the 27-nation EU. "There is a total
lack of environmental integrity in these HFC-23 projects. It's
sort of just a money machine going on."
'Bogus' Credits
At issue is whether Europe moves ahead on its own to curb
HFC-23, which has a global-warming potential 11,700 times more
powerful than carbon dioxide, the main greenhouse gas.
Regulators of the UN program, known as the Clean Development
Mechanism, are also ramping up scrutiny of projects involving
HFC-23 after environmental group CDM Watch said in June some
companies won "bogus" credits on HFC projects -- a claim
rejected by polluters and investors including Natsource LLC.
The EU refused to wait for a global consensus on tackling
plane emissions two years ago when deciding to add domestic and
foreign airlines as of 2012 to the European trading system. The
cap-and-trade program imposes CO2 quotas on businesses and
requires those exceeding their limits to buy permits from
companies that emit less.
Belgium, current holder of the EU's rotating presidency,
said tougher EU scrutiny of imported emission credits is
justified.
National Opposition
"We have some doubts about the CDM as they work now,"
Belgian Climate Minister Paul Magnette told reporters in
Luxembourg. Asked whether he expects national opposition to the
forthcoming commission proposal, he said: "I don't think so."
The European Federation of Energy Traders complained last
month about "complete regulatory uncertainty" over the future
use of UN emission credits in the EU and urged the bloc to
establish "a positive list of unrestricted credit types."
Hedegaard said the commission would produce an "impact
assessment" on the matter in mid-November and that a concrete
proposal would follow. She declined to speculate about the
details of any proposal, saying the commission is studying "how
can we best do this."
More broadly, governments worldwide are considering phasing
out production of HFC-23 under the ozone-protection rules of the
UN's Montreal Protocol.
For Related News and Information:
Top government articles: TOP GOV <GO>
Top environment-market stories: TOP ENV <GO>
Top energy stories: TOP NRG <GO>
Emissions-market news: NI ENVMARKET <GO>
European power-markets home page: EPWR <GO>
--Editors: Jones Hayden, Andrew Clapham
To contact the reporters on this story:
Jonathan Stearns in Luxembourg at +32-486-894-450 or
jstearns2@bloomberg.net;
Ewa Krukowska in Brussels at +32-2-237-4331 or
ekrukowska@bloomberg.net.
To contact the editors responsible for this story:
James Hertling at +33-1-5365-5075 or
jhertling@bloomberg.net;
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net.
