Europe – Saving energy-intensive industry billions

Europe – Saving energy-intensive industry billions
Published: 26 March 2004

Next month, the European Union (EU) is expected to approve the “linking directive”, an amendment to its emissions trading scheme (ETS) that has the potential to save energy intensive industries billions of euros in carbon reduction costs. Under the amendment, EU companies would be allowed to reduce their carbon dioxide emissions by means of projects in non-EU countries and use the carbon credits from those projects to trade in the CO2 market. This directive is particularly important to countries such as The Netherlands and Austria, which are actively investing in linking projects. For example, the Dutch government is relying on them to account for around half of its emissions reduction target, worth an estimated EUR700m.

In general, most EU sources expect the directive to receive a favourable welcome and subsequent approval when it is put to the Parliament on 22 April. "The likelihood of a deal looks very promising," said Olivia Hartridge, who heads the climate change issue at the EU Commission’s environment directorate. However, the amendment may have to overcome a few hurdles yet, relating to project eligibility and the weighting of the projects in the overall caps of a country.  To protect the ETS and its carbon prices, the directive will allow countries only to use linking projects for 50 per cent of their reduction target – the industry wants no ceiling. Holcim vice president for environment Bruno Vanderbought commented: “There should be no cap.” Cement is one of the energy-intensive industries most affected by the ETS.