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Hungary will ask EU to approve 30.7 mln-ton carbon limit

Hungary said it would ask the European Union to approve a grant of 30.7 mln metric tons of carbon-dioxide emission permits a year for the next phase of the EU's carbon-trading system, 3.2% less than the cap for the current phase.

The proposal was confirmed by Dóra Kelli, an Environment Ministry spokeswoman, in a phone interview from Budapest. The country had an annual ceiling of 31.7 million tons of carbon dioxide for the period 2005-2007. The new proposal must be approved by the European Commission, the executive arm of the EU, which clears the carbon-emissions trading plans of each member state. The national allocations plans determine how many permits companies in each country get. Companies that emit more carbon dioxide than their permits cover must cut their emissions or buy more permits. Those that emit less can sell their surplus permits.

The system is intended to give companies an incentive to emit less carbon dioxide, in an effort to meet the goals set by the Kyoto Protocol. The European Commission said on January 16 Hungary was among the countries that faced infringement procedures for not submitting their plans for the five-year second phase, which begins next year. The deadline was June 30, 2006. Hungary's Environment Ministry said in an e-mailed document the country wants to allocate 15.5 million credits to its power industry, 5.5 million to heating, 2.8 million to cement production, 1.8 million to iron and steel production and 1.4 million tons to refining industry. (Bloomberg)