Greece became the last country to meet European Union criteria allowing emissions trading, joining a scheme at the heart of the EU's policy to cut carbon dioxide emissions, officials said Monday.
BRUSSELS, Belgium — Greece became the last country to meet European Union criteria allowing emissions trading, joining a scheme at the heart of the EU's policy to cut carbon dioxide emissions, officials said Monday.
EU regulators approved Greece's emissions trading plan, granting its energy and manufacturing companies allowances covering emissions of 74.4 million metric tons of industrial carbon dioxide a year between 2005-2007.
The emissions trading system is a key part in the EU's implementation of the 1997 Kyoto global climate change pact, which commits the 25-nation bloc to cut its emissions of carbon dioxide by 8 percent from 1990 levels by 2012. So far, emissions are down only 2.9 percent.
All 25 EU member states are now eligible to take part in the emissions credit trading system, a market-based, stock exchange-like scheme aimed at helping companies to reduce emissions.
Under the trading system, launched on Jan 1, 2005, European companies that emit less carbon dioxide than allowed under set quotas can sell unused allotments -- credits -- to those who overshoot the target. The profit motive is expected to lead to substantial cuts in emissions of carbon dioxide, which makes up 80 percent of the EU's greenhouse gases.
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All EU countries have drafted "national allocation plans," setting maximum ceilings to their greenhouse gas emissions, which had to be approved by the European Commission.
Companies are allocated credits once a national electronic registry is set up in the country where they're based. Nine EU nations have set up registries so far, and about 50 percent of the credits are already in circulation. The other 16 nations have yet to finalize their registry plans.
"With this approval, the emissions-trading system is complete," EU Environment Commissioner Stavros Dimas said in a statement. "We are looking forward to active spot-market trading involving all member states, which can begin once all national registries have been put into place."
EU nations will let their industries trade ceilings. The plan covers 12,000 facilities -- from power units to pulp and paper plants -- and provides a cheap way to reduce emissions while keeping European businesses competitive.
Each company has a cap on its emissions. Some may choose to lower their emissions and sell the difference to companies that want to exceed their ceilings. The system allows companies to buy or sell allocations while keeping the national quota stable.
Carbon dioxide prices under the EU's trading scheme have more than tripled since January, hitting an all-time high of euro22.50 (US$27.4) a ton on Monday.
The EU estimates European companies will spend between euro2.9 billion to euro3.7 billion a year in emissions trading.
Source: Associated Press
