EU Makes its Move to Ratify Kyoto Protocol

BRUSSELS, Belgium, October 23, 2001 (ENS) - All 15 member countries of the European Union should ratify the Kyoto climate protocol by mid-June next year, the European Commission said today in a legislative proposal. This would see the global climate agreement legally bind the bloc by the close of next year's world sustainability summit in Johannesburg, scheduled for September.

The Commission also unveiled draft rules for an EU wide carbon dioxide emissions trading system. As proposed, the plan would not allow member states to exempt from trading any of the facilities in industrial sectors set to be covered.

In a third climate initiative, the EU executive laid out additional measures it will propose in the first two years of the European Climate Change Programme (ECCP).

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Steelmaking plants such as Corus Steel Works in the UK's Tees Valley would be subject to a proposed emissions cap-and-trade scheme. (Photos Ian Britton courtesy Freefoto.com)
Though the European Union has always maintained its intention to ratify the Kyoto Protocol, today's formal proposal to do so will provide the EU with a psychological advantage going into next week's climate talks in Marrakech, Morocco.

Once adopted by governments, the protocol will make legally binding the burden sharing agreement negotiated by environment ministers three years ago as a way of implementing the EU's eight percent greenhouse gas reduction commitment.

Under the Kyoto Protocol, an addition to the United Nations Framework Convention on Climate Change, 38 industrialized nations have agreed to cut their emissions of six greenhouse gases linked to global warming. Thirty-nine were to have been governed by the original agreement signed in Kyoto, Japan in December 1997, but President George W. Bush said in March that the United States would not ratify the protocol.

The Kyoto Protocol will not take effect until it is ratified by 55 percent of the nations responsible for at least 55 percent of the heat-trapping emissions.

The countries who ratify must reduce emissions of carbon dioxide to an average of 5.2 percent below 1990 levels during the five year period 2008 to 2012.

The Commission says all EU member states should ratify the protocol in time for the United Nations to be notified of their collective action before June 14, 2002. This will mean the agreement entering into force for the EU 90 days later - on the last day of the Johannesburg meeting at the latest.

So far three countries - France, Denmark and Netherlands - have parliamentary approval to ratify, while Belgium is on the verge of securing it.

In adopting an emissions cap-and-trade scheme with no opt out clause for industry sectors or individual facilities, and no government bail-outs of additional permits to facilities in trouble, even in the three year lead-in phase from 2005 to 2008, the Commission has backed Environment Commissioner Margot Wallström in a dispute with Industry Commissioner Erkki Liikanen which prevented formal appearance of the proposal last week.

Liikanen had argued for more flexibility for firms, at least during the lead-in. He was responding to pressure from German industry, which claims the plan will disrupt existing voluntary climate agreements. He was also pressured by the United Kingdom, which fears the EU scheme will be incompatible with its own national initiative, due to go live next year.

Under the EU proposal, member states will be free to allocate emissions allowances to firms, though the allocation plan will be subject to Commission scrutiny. During the lead-in phase the permits will be free. The Commission is to propose a harmonized allocation mechanism in 2005, for operation from 2008.

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Chemical plants such as this BP Chemical Complex in Hull, UK would be exempt.
Sectors to be covered by the newly proposed emissions cap-and-trade system include power generation, refineries, iron and steel, coke ovens, cement, glass and ceramics, pulp and paper and any combustion installation over 20 megawatts capacity. Chemicals and waste incinerators are exempted.

Fines for exceeding emission allowances would start at 50 euros per tonne in the lead-in phase, and 100 euros thereafter.

In its proposals for a series of follow-up measures under the ECCP the Commission has made several changes from earlier drafts, though plans for a law on cogeneration and a regulation on fluorinated gases remain.

The idea of a law on energy efficiency in public procurement has fallen by the wayside. Originally pushed by the Commission's Energy Directorate, this was opposed by Internal Market Commissioner Frits Bolkestein. A second planned law on energy services will now focus more widely on energy demand management.

Meanwhile, a draft biofuels law, expected imminently, could be split into two, with a first proposal setting minimum market share and a later one allowing tax breaks.

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{Published in cooperation with ENDS Environment Daily, Europe's choice for environmental news. Environmental Data Services Ltd, London. Email: envdaily@ends.co.uk}