EU energy package to hit consumers in coming years

The European Commission put forward a large energy and climate package on Wednesday, bringing new sectors of industry into emissions trading, aimed at reducing emissions of carbon dioxide.
     The package requires Finland to raise its share of renewable sources in energy production from the present 28.5 per cent to 38 per cent by 2020.
     New sectors to be taken into the emissions reduction programme include sectors which have been excluded from the emissions trading scheme, such as housing, construction, heating, transport, agriculture, and waste management.
     
While the package seeks to reduce total emissions of greenhouse gases, it also grants breaks to certain energy-intensive branches of industry, including sectors which are important for Finland, such as the metal, forest, and mining industries.
     European Commission President Jose Manuel Barroso says that the aim of this is to protect European heavy industry from foreign competition.
     Under the Commission's energy package, the industries will not be required to buy their emission rights on auction - at least not right away, when the next emission trading period begins in 2012 - unless an international agreement has been reached in cutting emissions.
      Helsingin Sanomat has learned that the question of special treatment of heavy industry was hotly debated within the Commission, and agreement was not reached on the matter until very shortly before the package was completed.
     
The proportion of biological fuels in transport is to be raised to 10 per cent by 2020.
     In other respects, the emissions trading system is to be altered so that the distribution of free emissions quotas will be replaced by an auction on the EU level. Sectors falling within the framework of emissions trading will be required to reduce emissions by 21 per cent from the 2005 level.
     Finnish ministers estimate that the extensive package will lead to intense bargaining between the member states and different branches of business.
     The European Commissioner for the Environment, Stavros Dimas, estimates that the auctioning of emission rights will bring the governments of the member states annual revenues of EUR 30-50 million.
     Some of the money is to be set aside to improve the energy efficiency of low-income households.
     
The aim of the package is to reduce greenhouse gas emissions by 20 per cent from the 1990 level by 2020.
     National governments will be required to enforce reduction in emissions from the sectors which have been excluded from emissions trading - housing, construction, heating, transport, agriculture, and waste management. Finland will be required to reduce greenhouse gas emissions coming from these sectors by 16 per cent by 2020.
     
In Helsinki, the package was announced by Minister of Economic Affairs Mauri Pekkarinen (Centre) and Minister of the Environment Kimmo Tiilikainen (Centre), who predicted that the package would result in intense bargaining over the distribution of the burden - both among member states, and sectors of industry.
     Pekkarinen emphasised that the issue is a common matter for the whole EU, in which everyone must be involved, and that if others start backing out, Finland will also have to reconsider.
      Tiilikainen noted that the 16 per cent cutback imposed on sectors outside the emission trading scheme is a challenging goal, but not impossible. Finland's burden was increased by the country's high GDP and its large per capita energy consumption.
     The Finnish government now will start preparing a programme and actions for reducing emissions from housing, heating, transport, agriculture, and waste management. Some of the ideas will be put forward in a government report on climate and energy policy, which will come before Parliament during the spring.


Previously in HS International Edition:
  COMMENTARY: Emissions trading for dummies (19.1.2008)
  New EU emissions trading period raises consumer price of electricity (3.1.2008)
  New emission trading period could cost nearly as much as 1990s bank crisis (7.8.2007)
  EU cuts Finnish emission quota (5.6.2007)
  WWF report: Finns´ ecological footprint third-heaviest in world (25.10.2006)