22nd Feb 2019

EU firms involved in CO2-cutback fiddles, WWF says

  • Drought: the overlapping credit systems could undermine each other (Photo: European Commission)

The EU's key tool to reach its Kyoto climate commitments – the Emissions Trading Scheme – is being undermined by polluting companies across Europe, which are buying their way out of cutting their greenhouse gas emissions, the World Wildlife Fund for Nature has warned.

In the report – Emission Impossible - launched on Wednesday (13 June) the NGO looked at the CO2 emission reduction plans of nine EU member states – France, Germany, Ireland, Italy, the Netherlands, Poland, Portugal, Spain and the UK – for the second trading period 2008-2012.

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According to estimates in the report, between 88-100 percent of the nine countries' combined emission reduction targets under the European Emissions Trading Scheme (ETS) could be met by buying Clean Development Mechanism (CDM) project credits from outside the EU.

The CDM is an arrangement under the 1997 international Kyoto Protocol allowing industrialised countries with a greenhouse gas reduction commitment - like the EU nations have - to invest in emission reducing projects in developing countries as an alternative to what is generally considered more costly emission reductions in their own countries.

To prevent industrialised countries from making unlimited use of CDM, Kyoto has a condition that use of CDM be "supplemental" to domestic actions to reduce emissions and that it should have an "additionality" proof - meaning that a project is delivering cuts in greenhouse gases that would not otherwise have happened.

However, this wording has led to a wide range of interpretations across the world.

More emissions in Europe

WWF therefore fears that because EU countries allow such high percentages of CDM projects by their companies, it could mean that the second trading period of the ETS will fail to deliver any significant emission reductions within the EU because it is cheaper to purchase CDM credits outside Europe.

"Instead of reducing carbon emissions and creating a more sustainable environment, companies included in the trading scheme are likely to purchase cheap external project credits that take investment out of the EU and sink them into potentially dubious Clean Development Mechanism projects," said Sanjeev Kumar from WWF European Policy Office.

UK daily The Guardian revealed earlier this month that according to an unpublished UN expert's report, there is alarming feedback from projects on the ground.

It suggested that up to 20 percent of the carbon credits already sold may have been tainted by gross incompetence, rule-breaking and possible fraud by companies in the developing world.

"There is a real danger that this will lock the EU into high carbon investments and soaring emissions for many years to come," Mr Kumar said.

But the European Commission, responsible for the running of the emissions trading scheme, has rejected the claim that the CDMs undermine the emissions scheme.

"On the contrary," said environment spokeswoman Barbara Helfferich. "We are linking up to the international community through the CDM projects."

She moted that whether emissions are cut in Asia or in Europe, it is still beneficial because greenhouse gas emissions is a global problem and not confined to continents.

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