EU Nations to Clash Over Carbon as Poland Threatens Veto

European Union nations are set for a clash over the bloc’s strategy to cut greenhouse gases at a meeting today after Poland threatened to veto any declaration that may lead to stricter targets in the future.

Three east European member states led by Poland object to any mention of the so-called milestones, or most cost-effective carbon-reduction levels, for 2030 and 2040 identified by the EU regulatory arm, in a statement to be adopted after the gathering of environment ministers in Brussels, according to government officials. Five other countries favor including in the conclusions a more ambitious goal for 2020, a draft EU document obtained by Bloomberg News showed.

“I expect it to be a long day,” said Martin Lidegaard, climate minister of Denmark, which holds the bloc’s rotating presidency in the first half of this year. “It’s no secret we have very different opinions around the table and it’s going to be quite a task to bridge all these different points of view.”

Political statements after EU ministerial meetings, which often lead to new legislation, require unanimous support. At stake is the pathway to Europe’s political goal of reducing pollution by at least 80 percent from 1990 levels by 2050 and the price of allowances in the bloc’s emissions trading system, the world’s largest, which slumped 50 percent in the past year.

‘Strongly Against Milestones’

Poland, which relies on coal for about 90 percent of its electricity generation and blocked an EU declaration on climate policies last year, has repeatedly said it would not accept more stringent climate policies than already agreed. It also opposes any decisions on post-2020 goals before Europe gets more clarity on a global carbon-reduction deal that countries worldwide agreed to achieve by 2015.

“We are strongly against milestones, indicators and intermediate steps,” said a Polish government official, who declined to be identified, quoting policy.

Carbon prices slumped to a four-year low of 6.30 euros ($8.36) a metric ton last year due to oversupply and uncertainty over the future emission-reduction framework. This prompted calls from investors including U.K.’s second-largest electricity producer SSE Plc on European policy makers to adopt ambitious intermediate climate targets.

“I’m pretty confident that the message we will get from the European countries today is that we should move on with our climate policies,” EU Climate Commissioner Connie Hedegaard told reporters before the meeting. “That’s what we’re going to fight for.”

‘Difficult Negotiations’

The EU is already on track to meet its binding goal of lowering CO2 discharges by 20 percent by 2020. The bloc may exceed this target and reduce emissions by 25 percent as long as nations step up energy savings, the commission said in a paper, known as the 2050 low-carbon road map, published last year and due to be discussed today.

“We have difficult negotiations ahead of us,” Swedish Environment Minister Lena Ek said. “The road map is really important for all the member states and for the European industry to have a clear view on where we’re going and where they should put their investment.”

The Danish presidency proposed ministers “recognize” the roadmap’s finding that “the gradual, cost-effective transition to a low-carbon economy in 2050 passes through milestones for EU domestic greenhouse gas emission reductions of 40 percent by 2030, 60 percent by 2040 and 80 percent by 2050 compared to 1990,” according to the draft conclusions dated March 1.

AAU Restrictions Opposed

Five nations, including the U.K. and Germany, favor adding the 25 percent milestone for 2020 to the text, while Poland, the Czech Republic and Romania object to the quantification of emission-reduction levels, according to three government officials, who declined to be identified, citing policy.

“The proposed formulation could be seen as an invitation from the council for the commission to present legislation to implement those milestones,” said the Polish official. “I don’t see this as a right moment in the middle of a financial and economic crisis.”

Poland will also object to restrictions on United Nations emissions rights after 2012, the official said. The presidency proposed that EU nations support limits on the carry-over of surplus Assigned Amount Units, issued to developed country governments under the 1997 Kyoto Protocol, after its initial period ends next year, according to the draft document.

‘ETS is Challenged’

The restrictions would also include limits on sales and the use of revenue from excess AAUs, the draft conclusions showed.

The option of temporarily withholding carbon permits from the EU emissions trading system, a measure that would curb supply and prop up emission prices, isn’t on the agenda of today’s meeting, according to an EU presidency official, who declined to be identified, citing policy.

“We definitely share the view of many member states that the ETS is challenged and the carbon price is too low to work as intended,” the official said. “When we’re not putting this subject on the table for tomorrow it’s because we think it’d be even more difficult for us to reach consensus on the long-term perspective if we mix those two debates.”

To contact the reporters on this story: Ewa Krukowska in Brussels at ekrukowska@bloomberg.net.

To contact the editors responsible for this story: Stephen Voss at sev@bloomberg.net

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