Companies are calling for longer term certainty on what targets they must meet to comply with the EU's greenhouse gas emissions trading scheme, according to a report by the European Commission.
The findings are part of the conclusions of a consultation published thisweek by the EU on the bloc's Greenhouse Gas Emission Trading Scheme (EU ETS),which went into effect in January this year.
The scheme is part of the bloc's plan to reduce greenhouse gasemissions to meet international commitments under the Kyoto Protocol. The"cap-and-trade" scheme, which took effect from January 2005, allowscompanies to buy and sell carbon dioxide (CO2) emissions rights on speciallyconstructed Internet sites.
The food processing industry is a major energy consumer and discharger ofgreenhouse gas through its reliance on cooking, refrigeration, freezing and aircompressor systems.
As reported previously in FoodProductionDaily.com, the EU's food industryassociation has submitted a policy document to the Commission arguing that the trading scheme is being applied inconsistently across the bloc, hurts smaller companies and should not be expanded to other types ofemissions. The CIAA is lobbying for changes to the agreement.
Under the scheme companies must buy credits on the open market if they failto reach their yearly allocations or face fines. They could also chose to cutemissions by taking action on cutting their energy use or by investing inanti-pollution equipment.
In the current consultation companies across the affected sectors said theyneeded longer-term certainty and predictability about the scheme. In particularthey said they needed certainty about the allocation of emission allowances sothey could make long range plans to meet the requirements.
Half of the 300 companies that responded to the survey said it is alreadyinfluencing their investment decisions. About half of them said the scheme has astrong or medium impact on decisions to develop innovative technologies toreduce their emissions.
Companies, industry associations, governments and consumer groups all saidlonger-term certainty on reduction targets and allocation rules would ensure abetter investment climate for companies.
Under the legislation the Commission must review how the scheme is beingapplied and reports to the European Parliament and to the Council by 30 June 2006. The Commission's commissioned McKinsey & Company and Ecofys to monitor and review the scheme during 2005 and 2006.
McKinsey & Company and Ecofys are also examining the impact of expandingthe ETS to other sectors and gases, and the actual impact of the programme oncompetitiveness.
In a separate report released yesterday, the Commission says the EU is well on its way to achieve its Kyoto Protocol targets for reducing emissions of greenhouse gases.
The latest projections from member states indicate that a combination of existing and planned policies and measures will reduce combined EU-15 emissions to 9.3 below below 1990 levels by 2010.
"This clearly fulfils the eight per cent reduction target from 1990 levels that the protocol requires the EU-15 to achieve during 2008-2012," the Commission stated. "The projections show that EU-25 emissions would be cut by more than 11 per cent. Seventeen member states with emission targets are currently projected to meet them, while the others are in the process of identifying further actions.