Power Utility Wants Auctioning of CO2 Permits by 2020


BRUSSELS - Power companies should by 2020 have to buy all their permits to emit carbon dioxide under the European emissions trading scheme rather than receiving them for free, the head of Germany's E.ON AG said on Thursday.

Chief Executive Wulf Bernotat said he favored a gradual implementation of full auctioning or selling of carbon allowances from 2013, when the third phase of the scheme is slated to start, to 2020.

He also called for a more harmonized way of distributing the permits across the 27-nation bloc instead of the current method under which each EU nation draws up its own national allocation plan (NAP).

"It's important for the conditions in Europe to be similar," Bernotat told reporters. "Twenty-seven NAPs don't help in building a European trading system."

The European Commission is studying ways to revamp the scheme, its key tool to fight climate change and meet commitments to cut greenhouse gas emissions under the Kyoto Protocol.

It plans to present new legislative proposals in December and has indicated that a more centralized system and a higher proportion of auctioning were likely to be part of the revision.

Britain's Centrica favors having 100 percent auctioning of CO2 permits as soon as possible, a spokesman said.

(additional reporting by Gerard Wynn in London)