Germany has not made a final decision on its carbon dioxide emissions quota for 2008-12, its environment ministry said on Wednesday, describing media speculation that it would set tougher targets as misleading. EU states must propose by June 30 new limits on CO2 emissions in the second phase of its carbon market, as the bloc tries to catch up on its Kyoto climate change targets and turn around rising pollution.

Germanys environment ministry denied reports that its power industry would be treated more generously than previously announced, and described as misleading speculation that the overall quota would be cut compared to previous proposals. "There will be no change in the requirement for the (power) industry to cut its CO2 emissions by 15 million tonnes annually, which is a 3 percent cut over the years 2000-2002," a ministry spokesman said.

A report in the Berlin Tagesspiegel had suggested on Tuesday that the overall German quota would be cut further, while power producers would be treated more leniently. Analysts Point Carbon reported on Wednesday that a 482 million tonnes CO2 per year quota was on the cards, down from a previously announced 495 million tonnes proposal. Germanys current quota is 499 million tonnes a year.

"That calculation (the 482 million) is misleading because the year 2005, which was low in emissions, was used as a reference period," the spokesman said. "In reality, the certificates will be allocated on the basis of the average emissions over several years." The European Commission has urged EU states to set tough targets in phase 2 of the market, especially after it emerged that most countries, including Germany, gave their industry more emissions permits than they needed in 2005.

Supporters of the EU carbon market see this as the best way to turn industry to clean energy sources like nuclear, wind and solar, or else to new technologies, for example burying CO2 underground, using carbon sequestration. A press release issued by the Berlin ministry on Wednesday said the cuts for industries other than utilities would be 1.25 percent so as to safeguard their competitiveness. Other outstanding phase 2 issues are whether coal and gas fired power stations will be treated equally and whether transport and private households will be included in the scheme.
(Planet Ark, 22/06/2006)