Combating climate change

23rd January 2008

ENERGY-intensive industries, such as Corus and Anglesey Aluminium, have been thrown a lifeline today as the European Commission announced special measures to safeguard the industries would be included in its so-called ‘green strategy'.

The European Commission has unveiled proposals to fight global warming and reduce the EU's dependence on imported energy.

The strategy includes:

• a mandatory cap on greenhouse gas emissions for each EU country
• a mandatory target for the share of renewable energy in each country's total energy consumption. The UK has been set a target of 15% of all domestic energy use by 2020.
• proposals to reform the European Emissions Trading Scheme (ETS). *

It follows agreement by EU leaders last year to meet the so-called "triple twenty" challenge - to cut overall greenhouse gas emissions by at least 20% compared with 1990 levels; to find at least 20% of all energy needs from renewable sources; and to increase energy efficiency by 20% - all by 2020.

Eluned Morgan, Labour's European spokesperson on industry and energy, welcomed today's proposals as ‘solid evidence that the EU is ready to take a lead on tackling climate change'.

Ms Morgan also welcomed news that under the proposed reform of ETS, carbon permits would be issued free to energy-intensive industries - such as Corus and Anglesey Aluminium.

The Labour MEP has long argued that any reform of ETS must include special measures for high energy-using companies competing with others outside the EU. It had been feared that such industries could otherwise be forced to re-locate production, resulting in a mass loss of jobs and the transfer carbon emissions to countries with little, or no, environmental regulation.

ELUNED MORGAN said:

"The Commission's proposals provide solid evidence that the EU is ready to take a lead on tackling climate change.

"I particularly welcome the Commission's move to auction carbon permits under ETS - something that I have long called for. This is a significant advance, and together with maintaining a tight cap on the number of permits, it should ensure a high carbon price which will guide investment into renewables and low carbon sources, and make a real impact in the fight against climate change.

"It is also good news for Wales that the Commission has recognised that energy-intensive industries - like Corus and Anglesey Aluminium - compete in a global market and that without special measures they would be forced to shift production elsewhere, to countries where the environmental regulation is poor or even non-existent.

"Any regulation that failed to take account of this would have seriously damage our economy and work against the environment - actually hindering the fight against climate change."

Notes
• *A ‘cap and trade' system designed to limit pollution from heavy industry by setting a limit of so-called carbon ‘permits' which companies can buy and sell. While emission permits are currently distributed to industry for free, under the reform, they are to be auctioned.
• Eluned Morgan is MEP for Wales and was the European Parliament's rapporteur on the EU Strategy for Sustainable, Competitive and Secure Energy. She is currently compiling a key European report on the future of the EU electricity market.