15 December 2004

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Malta to submit plans for emissions trading at last minute

By the end of the year Malta is expected to submit its national plan for emissions trading, just in time to join a global carbon dioxide emissions trading market aimed at reducing gasses which cause global warming - provided its plan is accepted by the EU Commission.
While most EU countries have already submitted their plans, Malta will be among a group of five countries that plan to submit theirs by the end of the year along with Spain, Hungary, Lithuania and Cyprus. The Czech Republic, Greece, Italy and Poland will miss the boat.
Provided its plan is accepted, Malta will join 20 other EU states when the market opens. In 2003 the EU had decided to set up an emissions trading market to meet the Kyoto climate award and in 2005, it will be first among the signatories of the Kyoto Protocol to put into practice a market of emission rights.
In accordance with the EU’s reduction objectives, each Member State is required to draw up a national allocation plan that assigns each industrial plant a certain number of emission quotas of green house gases, where one quota equals one tonne. Each plan is then scrutinised by the European Commission. The Commission will only approve the national plans if it feels the quotas allocated to each company are sufficiently restrictive.
News of Malta’s plan has been scant and it is not known whether Maltese companies will need to buy or sell rights. All EU countries will be made to fall within limits to be drawn up by the EU Commission, but companies will be able to buy emissions rights to go above their set limit.
France had its plan sent back by the EU Commission last September but the differences have since been resolved.
According to Agence France Presse several countries, including Spain, are investing in cleaner technologies in other countries so the pollution that is avoided can be added to the limit in the home country.
Emission allowances are to be allocated in two stages. First a quota is given to each industry sector, then quotas are divided among companies in those sectors. Allowances are allocated based on historical evidence of emissions. A cap on emissions has been set for each company, which they must not exceed. If they do, they have the option of buying allowances in the open market from other companies in the EU scheme. Companies that go over their agreed limit will face a penalty.
During the first phase fines will be set at 40 euros per allowance of one tonne of carbon dioxide. The system is the result of the Kyoto agreement in 1997 when countries committed themselves to reduce by 2012 their emissions of green house gases by 5.5 percent from 1990 levels. However, the EU, which produces about 15 percent of total global emissions, decided to go further than this target and set for itself the objective of reducing its emissions of green house gases by 8 percent from 1990 levels.
The first phase of these plans, which are set to last from 2005 to 2007, will only deal with emissions of carbon dioxide. The other five green house gases will be dealt with later in the second phase that is due to start in 2008 and last until 2012. In the first phase only certain sectors will be concerned, notably the energy sector (electricity and oil refining), and metal works, paper mills, and cement works.

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
The Malta Financial & Business Times, Newsworks Ltd, Vjal ir-Rihan, San Gwann
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