Friday

27th May 2022

EU in talks on more international emission deals

  • The EU is in talks with South Korea, China, Switzerland and California (Photo: DerGuy82)

The EU is pressing ahead with talks on further bi-lateral carbon emissions agreements with a deal with Australia just announced.

Isaac Valero-Ladron, spokesperson for EU Climate Action Commissioner Connie Hedegaard, said that talks on new bi-lateral deals on emissions trading were "underway with South Korea, China, Switzerland and California".

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The admission follows the announcement Tuesday (28 August) by Commissioner Hedegaard and Australian Climate Change minister Greg Combet of a bi-lateral deal that would create the world's largest emissions trading market if ratified.

Under the deal, Australia, which at 27 tonnes per person is among the world's biggest carbon polluters per capita, will scrap its AUS $15 floor price (€12.5) intended for 2015, replacing it with EU prices which are currently being traded at between €8 and €9 per tonne.

Australian businesses would have one-way access to EU carbon allowances to meet 50 percent of their carbon liabilities until 2018. Provided that agreement can be reached, the two markets would then be fully integrated from July 2018 allowing European and Australian firms to use up to 100 percent of each other's allowance.

Hedegaard welcomed the deal as "the first full-intercontinental linking of emission trading system" adding that it would be "further evidence of strong international co-operation on climate change."

The Commission is now seeking the backing of member states and MEPs to agree a formal trade treaty with Australia with a deadline of mid-2015. "We don't see why someone would be against more business opportunities for European companies in the carbon market, said Valero-Ladron.

The passage of the treaty is likely to be tougher in Australia. With Labour Prime Minister Julia Gillard reliant on three Independent MPs for her parliamentary majority, the deal could face a difficult path in the federal parliament.

The deal has already come under attack from Tony Abbott, the leader of Australia's opposition Liberal party. Abbott, whose party opposed the Australian emissions trading scheme established in 2011 by the Labor government's Clean Energy Act, told reporters that brokering the deal was "wrong-headed" adding that "our traders...our competitors are not introducing this tax."

Although Gillard's government has a parliament mandate to negotiate with the EU, the country's next federal elections are due in November 2013. With current opinion polls indicating victory for Abbott's Liberal/National coalition, the deal could yet be sunk before it starts.

The EU Emissions Trading Scheme was launched in 2005 and will enter its 'Phase III' from January, which for the first time will involve an overall EU cap. If met, this would see a reduction in carbon emissions of almost 10 percent.

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