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Hungary may start distribution of carbon allowances this month

The government may approve the country's plan to distribute carbon emissions permits on March 21, which would allow companies to start trading credits before the end of this month, a ministry official said. “We got only a few modification requests to our proposal, so the government may approve it at its session on March 21,” Ágnes Kelemen, director of the Environmental Ministry's climate change department told Bloomberg in a phone interview today. She said companies may receive their permits before the end of March. Hungary will start distributing permits this year for the European Union's emissions trading system, which began in 2005. It requires industrial sites in the EU to have a permit for each ton of carbon dioxide they emit. Those that emit more carbon than they have permits for must buy extra permits, giving them an incentive to reduce pollution. The Environmental Ministry proposed that the 229 industrial sites emitting the most carbon dioxide in Hungary should receive 93.5 million allowances for the period from 2005 to 2007, Kelemen said. Hungary plans to auction 2.5% of the permits and reserve another 2% for sites starting emissions until 2007, she added.