Six countries oppose EU plan to reduce carbon allowances

A document obtained by revealed that an EU plan to reduce the number of?free CO2 permits?given to industry has been met with resistance from?six countries who have asked for looser rules in order to help companies cope with the impact on energy prices due to the Iran War. This month, the European Commission proposed a new set of rules on how many free emission permits will be given to industries until 2030.

Brussels has said that the changes will have a global impact on reducing the 'carbon costs' industry must pay by EUR4 billion (4.66 billion dollars) by the end if the decade. This is because the number of free allocations given out less quickly than originally expected.

Bulgaria, Greece, Poland and Romania have all asked the Commission to freeze the number CO2 permits that are given away for free at the levels of last year.

In a "joint document" seen by them, they stated that high energy prices which have risen since the beginning of the Iran War at the end February were a threat to the competitiveness for energy intensive industries.

The proposed rules could increase the threat of losing their competitiveness on global markets, or of closing down or moving outside the EU.

Emissions Trading System (EU's carbon market) is the main tool the EU uses to combat CO2 emissions and the climate change. It does this by forcing polluting industries to purchase permits. Some heavy industries and governments whose countries use carbon-intensive energy mix are pushing for more CO2 permits. Other governments, such as Spain and Sweden who are further along in the clean energy transformation, have asked Brussels to not weaken the emissions trading system.

The six government papers will be discussed by the EU's industry ministers at a Thursday meeting. The final version of the Commission's CO2 free?permit regulations is expected to be approved by the end of June.

In mid-July the EU will also propose a revision of the system for trading emissions that is longer-term, in order to align the system with the 2040 climate targets.

(source: Reuters)