Germany Puts Deeper Carbon Cut Back on EU Agenda

24.05.2012 -

Germany has asked for discussion on deeper EU carbon emissions cuts to be put on the agenda at a meeting of environment ministers in June, EU sources said.

If agreed, a more ambitious target could help to spur the European Union's carbon market, which has sunk to record lows.

Previous debate of bigger carbon cuts, however, has been difficult, with coal-reliant Poland objecting that they could damage its economy.

"Germany asked for it (a deeper cut) to be added to the environment council agenda," one of the sources said, speaking on condition of anonymity. The meeting of ministers is set for June 11 in Luxembourg.

"It will be debated as part of discussion on the transition towards a competitive, low-carbon economy."

No one from the German representation in Brussels could comment immediately.

German Chancellor Angela Merkel faces the challenge of coping with a switch from nuclear to green energy.

The Emissions Trading Scheme (ETS), set up to be the mainstay of the EU's climate policy, should encourage green power.

But its collapse to record lows means that it is having the opposite effect and has been driving investment in coal-fired generation rather than gas, which is the cleanest of the fossil fuels, analysts and utility companies have said.

They have also argued a carbon price of anywhere between €20 ($25.17) and €50 is needed to support continued investment in renewables, compared with less than €7 on Thursday.

The Commission has said it will reassess its auctioning time-table, which could help to reduce a surplus of carbon allowances generated by the depth of the EU's recession.

Increasing EU ambitions on emissions cutting could also have the effect of reducing the surplus.

Polish opposition

Poland has been at the forefront of opposition to anything that would boost the carbon price and increase the costs of offsetting its emissions.

It vetoed efforts at a meeting of environment ministers in March to agree non-binding goals for deeper carbon cuts outlined in a 2050 road map.

Early this year, the European Commission published analysis showing the cost of moving beyond its existing policy of cutting carbon emissions by 20% by 2020 would be cheaper than originally thought.

The bill would be bigger for newer EU member states, such as Poland, but such nations also have a greater potential to benefit from improvements in efficiency and the jobs that would be created.

Within the context of the international Kyoto process on tackling climate change, the EU has said it would move up to a 30% carbon reduction goal on condition that other major economies carry out their fair share of emissions reduction.

The EU as a bloc has been meeting both its Kyoto emissions cutting targets and is on track to reach its 20% domestic target.

Next week, it is expected to publish the latest figures it has submitted to the United Nations Framework Convention on Climate Change (UNFCCC).

Jacqueline McGlade, executive director of EU body the European Environment Agency, told Reuters the figures for 2010 would show that, as the economy rose, carbon emissions had increased more than gross domestic product.

"There was a significant rebound in emissions, larger than GDP. That is not good news," she said. "It would have been worse had we not had expansion in renewables."