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EC policy calls for CO2 cuts

THE EUROPEAN Commission's new climate-energy policy, which it unveiled at the beginning of this year, has some in the Slovak energy and industrial sector expressing concern.

THE EUROPEAN Commission's new climate-energy policy, which it unveiled at the beginning of this year, has some in the Slovak energy and industrial sector expressing concern.

The policy introduces several measures aimed at helping European Union member states achieve environmental goals related to combating climate change. One of the largest differences it presents is that companies will now have to buy their licences for limits on CO2 emissions from the state, rather than being assigned licences for free.

The industrial sector has warned the policy could have a negative impact on the European economy in the coming decade, saying companies were very likely to move outside Europe, to countries with less strict environmental legislation.

Slovakia's main producers said they respect the principles of the environment protection, but that the policy should have been discussed with the industrial sector and other countries, not adopted unilaterally.

The policy implements the goals enumerated at a summit last March, at which the EU committed to cutting CO2 emissions by 20 percent by 2020 compared to 1990. If more countries joined the EU's effort, the union declared it would be possible to decrease emissions by 30 percent. The EU also wants 20 percent of energy consumption to use renewable sources by 2020. The share of bio-fuels used in transport should reach 10 percent by that year, according to the policy.

Greenpeace Slovakia reacted positively to the initiative. The Slovak Republic and some other member states would never adopt such measures if it was left solely up to them, said Juraj Rizman, spokesman of Greenpeace Slovakia.

"The economic impact of the cuts in CO2 emission limits that the policy requires will cost the EU around 0.5 percent of GDP," Rizman told The Slovak Spectator. "That volume will not represent a significant problem for the union."

It is a commonly repeated misconception in Slovakia that environmental protection stunts economic development, Rizman said. In fact, the development of eco-friendly technologies provides a stimulus to science, research, and innovations, he added.

"We should also remember the creation of new jobs in clean technology industries and the positive impact on regional development," Rizman said.

On May 23, The Association of Metallurgy, Mining, and Geology in Slovakia stated its commitment to meeting the EU goals, but stressed that slowing climate change should not mean forgoing sustainable growth, competitiveness, and security of supplies to the European market.

The EC proposal on a new system of trading in greenhouse gases emission limits can disproportionately increase costs for the affected industries and lead to their forced departure from the European market, the statement reads.

"This would, paradoxically, have a negative impact not only on European economy but at the end of the day on the environment as well," reads the statement.

According to the association, the EC should form a list of sectors threatened by possible relocation of production outside of countries bound by strict rules for CO2 emission limits (carbon leakage), and devise a method for allocation of emission limits that would use fair reference values for every sector. The statement holds that high volume energy industries can stay competitive only if they are assigned free emission limits until international or global agreements make conditions for all international competitors equal.

Ján Bača, the spokesman of US Steel Slovakia, told The Slovak Spectator that the company feels a high degree of uncertainty about the policy and what it may bring to high volume energy industries.
Such industries face competitive imports to the EU with companies that do not meet European criteria for effectiveness and also do not face emission limitations, he said.

"There is a risk that high volume energy industries could leave Europe due to changes planned after 2012," he told The Slovak Spectator.

The company intends to continue cooperating with the Slovak government and European Confederation of Iron and Steel Industries in order to improve the proposed measures.

The only refinery in Slovakia, Slovnaft, hopes that despite the costs and hurdles, EU environmental legislation will contribute to permanently sustainable development.

However, its spokesman Anton Molnár, added that for European refineries, including Slovnaft, the obligation to purchase part of their emission quotas means increased costs, which will have an unfavourable impact on European refineries' competitiveness.

"The oil industry faces global competition," he noted.

Kia Motors Slovakia said the company has a sensitive perception of the policy and is developing internal strategies for its fulfilment in cooperation with the technical centre at European Kia Motors headquarters and headquarters in Korea, said its spokesman, Dušan Dvořák.

Volkswagen Slovakia said it considers climate protection a global challenge that can only be solved on a global level.

One-sided EU measures aimed at preventing climate change can threaten competitiveness, jobs, and production capacities, said Vladimír Machalík, the company's spokesman.

"Along with other employers, we have thus appealed to the Slovak government not to sacrifice jobs by automatically approving this climate-energy policy at the spring session of European Council," he told The Slovak Spectator. "It is necessary to adopt a clear legislative framework, without one-sided limitations that could lead to companies moving operations in the near future to countries that don't have limits on greenhouse gas emissions."

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Topic: Industry

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