Germany Sees ‘Intensive’ EU Carbon Talks in September, October

Germany plans talks with other European Union countries about the bloc’s long-term climate goals and expects “intensive” discussions on the EU carbon-cut pathway in autumn, Environment Minister Peter Altmaier said.

The EU debate on its post-2020 strategy to lower greenhouse-gas discharges stalled after Poland in March blocked for a second time a political declaration to back a strategy paper by the European Commission on the cheapest carbon- reduction trajectory. Germany was trying to raise the issue of the so-called Low-Carbon Roadmap in June to stress its importance, Altmaier said in a July 8 interview during an informal meeting of EU environment ministers in Nicosia, Cyprus.

“We’re now going to have a series of bilateral talks with key countries, like Poland, and personally I’m convinced we can find pragmatic solutions acceptable for both sides, taking into account justified interest of countries like Poland, which has a very specific situation due to its coal mines and power plants,” he said.

The commission’s Low-Carbon Roadmap shows that Europe can exceed its current target of cutting emissions by 20 percent from 1990 levels in 2020 and reduce CO2 discharges by 25 percent domestically as long as it steps up energy efficiency. The cheapest way to attain the bloc’s long-term goal of cutting at least 80 percent of greenhouse gases is to lower them by 40 percent in 2030 and 60 percent in 2040, according to the paper.

“I expect intensive talks on it in autumn, especially in September and October,” Altmaier said. “And it’d be great if we could find an agreement before the end of the year.”

Longer-Term Goals

Poland, which relies on coal for more than 90 percent of its energy consumption, has repeatedly said the EU should not tighten its existing target or decide on longer-term goals without a global deal to cut greenhouse gases. Stepping up EU ambitions could hurt the bloc’s competitiveness and trigger the relocation of businesses to countries without emission curbs, Polish Environment Minister Marcin Korolec said on July 7.

“I think it’s possible to take account of these specific national situations in implementing more ambitious targets in the Low-Carbon Roadmap and that’s what we’re trying to achieve,” Altmaier said. “Give us a chance.”

Companies including Germany’s biggest utility EON AG and Europe’s largest oil company Royal Dutch Shell Plc (RDSA) have repeatedly called on the EU to set its post-2020 climate goals to encourage investment in clean technologies. They have also urged policy makers to curb the oversupply of allowances in the bloc’s emissions cap-and-trade program, which knocked carbon prices down to a record low earlier this year.

More Efficient

The pollution caps that the EU emissions trading system, or the ETS, imposes on more than 12,000 facilities owned by manufacturers and utilities were set before the economic slowdown that cut into industrial output. The system doesn’t allow any minimum or maximum prices. To alleviate the oversupply EU Climate Commissioner Connie Hedegaard is planning to propose before the end of July a measure to postpone auctions of some carbon permits in the third phase of the ETS starting in 2013, an idea known as backloading.

“We made it clear repeatedly that we want to see the ETS more efficient,” Altmaier said. “I haven’t seen the proposal yet and much depends on the degree that is proposed. For the time being we’re not hostile, but very much interested in considering it.”

The backloading proposal will be published along with a report on the functioning of the EU carbon market, which will sketch long-term options to improve the system. One potential measure to be included in the report is increasing the 1.74 percent linear factor by which European emission caps are set to fall annually in the next trading period, people with knowledge of the matter said last month.

Effective Instrument

“It’s my conviction that we have to make sure that the ETS stays and becomes an effective instrument, but it’s also my conviction that we need a flexible and pragmatic phasing-in that will avoid a clash with the business sector,” Altmaier said.

Starting the ETS in 2005 as the world’s biggest cap-and- trade emissions market gave the EU a leading role in fighting global warming, which scientists say will cause more intense heat waves, floods and storms. The bloc needs to keep up pressure on countries worldwide to commit to reducing greenhouse gases blamed for climate change, Altmaier said.

To help accelerate international emissions talks Germany will hold a meeting next week in Berlin with the representatives of Qatar, the host of the United Nations next climate summit that is scheduled to start in November, Altmaier said.

Take The Lead

“We all know the international environment is difficult. We’re having the financial crisis in Europe and we’re facing presidential elections in the U.S., but EU countries are prepared to take the lead,” he said.

One of the key issues that European nations and other countries are faced with is to attract private investors to climate-related projects, according to Altmaier. At their meeting in Nicosia EU ministers stressed the need to encourage pension funds, insurance companies and banks to more involvement in climate change adaptation and clean technologies, he said.

“We realize there’s a lot of private money floating around, looking for safe havens and good rates of investment, but these people often don’t know yet about the enormous potentials of renewable energy, about impressive margins, so we have to organize a process of exchange of best practices, data and information should be made available to them,” he said. “It’s very important to take more private capital aboard.”

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

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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