European Union regulators reduced Spain's new air-pollution permits for energy and manufacturing companies in a fresh bid to ensure companies pay for some allowances.
The European Commission cut the Spanish government's grant of emission permits for power plants and factories to 152.3 million metric tons of carbon dioxide a year from 2008 through 2012. Spain, Western Europe's fastest-growing emitter of such pollutants, had requested an annual cap of 152.7 million tons. The cutback, which also extends to Spain's use of imported credits, „helps create the scarcity in allowances that is essential,” EU Environment Commissioner Stavros Dimas said in a statement today in Brussels.
Over the past three months, the commission has ordered 13 other governments to reduce new grants by about 7% on average. The 27-nation EU is trying to curb carbon dioxide through an emissions-trading system that imposes quotas on businesses and requires those exceeding their limits to buy permits from companies that emit less or pay a penalty. Around 11,400 installations are covered by the program, which targets carbon dioxide because it's the main greenhouse gas blamed for global warming.
The commission, the EU's regulatory arm, wants to restore investor confidence in the system after permit prices slumped last year when it emerged companies had a surplus in 2005. Existing caps cover an initial period from 2005 through 2007.
Spain's permits in the current period account for about 8% of the EU total. The Spanish government granted allowances to emit 174.4 million tons of carbon dioxide a year on average in 2005-2007. Emissions trading aims to help the EU meet its commitment under the global Kyoto Protocol to reduce greenhouse gases by 8% in 2008-2012 compared with 1990. The system allows EU nations to import extra credits for emissions-reduction projects outside the bloc.
In its ruling today, the commission also scaled back Spain's use of imported credits in 2008-2012 to 20% of the country's total in the period compared with 39% proposed by the Spanish government, commission spokeswoman Barbara Helfferich told reporters. Use of such credits is meant to supplement domestic action to curb emissions and Spain's proposal was „not consistent with the rule,” the commission said in its statement. (Bloomberg)