The European Commission sent final warning letters to the four countries because they have yet to submit plans for allocating carbon-dioxide emission permits to power plants and factories beginning in 2008. The EU’s 25 governments faced a June 30 deadline to hand in the proposals, which the commission must approve. „We will have no choice but to take them to court if they do not send their allocation plans soon,” EU Environment Commissioner Stavros Dimas said in a statement released today in Strasbourg, France.

Lawsuits by the commission, the EU’s regulatory arm, would be filed at the European Court of Justice. The EU imposes carbon-dioxide quotas on 11,400 power plants and factories, forcing businesses that exceed their limits to buy permits from companies that emit less or pay a penalty. Existing caps cover an initial period from 2005 through 2007 and the new grants will be for the five-year period 2008-2012.

The legal threats against Italy, Hungary, Denmark and Austria come two months after they received initial warnings and two weeks after the commission ruled on 2008-2012 allowance plans by 10 countries including Germany and the UK The commission ordered those nations to allocate on average 7% fewer permits than the governments had proposed. In October, the commission also sent initial warning letters to Spain, Portugal, the Czech Republic and Slovenia for failing to submit 2008-2012 allowance-allocation plans. These four countries have since handed in their proposals, commission environment spokeswoman Barbara Helfferich said by telephone from Brussels. (Bloomberg)