Germany set to clash with EU on CO2 pollution quotas

3/07/06 | Bron: Euractiv.com

EU member states have until 30 June to submit their CO2 allocation plans for the second trading period of the EU emissions trading scheme (EU-ETS), which covers the period 2008-2012.

Under the ETS, some 12,000 power utilities and energy-hungry industrial installations have been able, since 1 January 2005, to buy and sell permits to emit carbon dioxide, covering about 40% of the EU's total CO2 emissions.

EU countries define a CO2 cap for each plant covered by the scheme, in line with their commitments to reduce emissions of global warming gases under the Kyoto Protocol. Companies that emit less than their individual allowance can make a profit from selling their surplus on the market. The system thereby creates an incentive for big polluters to invest in cleaner technologies. The limited number of pollution allowances is aimed at keeping prices high enough for the system to continue being worthwhile.

The ETS is the EU's flagship policy to fight climate change and meet its Kyoto pledge to reduce emissions of global warming gases by 8% by 2012.

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