Environment

  • The commission does not believe there will be much change to the distribution of allowances (Photo: European Commission)

Commission says Poland, Estonia cannot issue more carbon allowances

25.09.09 @ 09:27

  1. By Leigh Phillips

Despite a court victory over the European Commission, Poland and Estonia cannot issue additional carbon permits, the EU executive has said.

The European Court of First Instance on Wednesday backed complaints from the two eastern EU member states, saying that the commission had "exceeded the limits of its power" when it rejected their national carbon emission reduction plans.

On Thursday, EU environment commissioner Stavros Dimas said that as a result of the court's ruling, the commission would now have to reconsider its decisions on the two countries' emissions strategies, but that the two countries should wait until it did so.

"Ahead of these decisions, those countries are not allowed to issue any additional allowances beyond those created in the E.U. ETS registry system," he said in a statement.

Mr Dimas added that in any case, following the commission's reassessment which would employ data on emissions from 2005 to 2008, there would probably be little change to the carbon allowances that could be distributed.

"In the light of these data, it would appear unlikely that there would be any material difference concerning the total number of allowances consistent with the terms of the directive."

"The actual 2008 emissions in Estonia and Poland correspond closely to those anticipated in the Commission Decisions," he said.

Meanwhile, Italian Prime Minister Silvio Berlusconi has used the occasion to argue that his country should be able to issue additional carbon allowances in a letter to European Commission President Jose Manuel Barroso.

"I'm well aware of [the letter]," the commission's environment spokesperson, Barbara Helfferich told reporters on Thursday. "The CO2 limits are set and are normally non negotiable."

Under the EU's emissions trading scheme, the bloc's main pillar of its climate policy, major carbon emitters must submit annually a number of emission allowances to their government that are equivalent to their CO2 emissions for that year. If they do not release as much carbon as their allocation, they can sell on their surplus allowances. If they exceed their carbon allowances, they are obliged to purchase extra.

The main fault with the ETS however has been that member states, responsible for emissions allowance allocations, have over-allocated allowances.

As a result, from 2012, the emissions allowances will be centralised in the hands of the commission, ending the system of national allocation plans (NAPs).

Until then, the commission has the power to review these plans. But the court found that in limiting the NAPs of Estonia and Poland, it had surpassed the boundary of its authority.