German Industry: EU’s CO2 Plan Brings Sky-high Carbon Taxes

September 17, 2008

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Energy user’s group VIK recently told Reuters that Germany must push for change in how financial burdens of tighter carbon trading rules set for 2012 should be shared among European countries.

“The EU plans in their current shape will not lead to any more CO2 emissions savings, as those are capped, but bring sky-high new carbon taxes,” said Alfred Richmann, managing director of VIK.

In addition Richmann warned of a “tsunami of power price hikes,” which could threaten the industry’s competitiveness and jobs. Power prices may increase by 50 percent after 2012.

His remarks come after the the European Parliament’s industry committee ignored German pleas for free CO2 emission permits and endorsed plans for CO2 emitters to buy permits for their GHG emissions from 2013 at auctions.

VIK estimates the auctions will bring the government $21 billion of additional annual income.

Similarly, a paper by the Business Council of Australia also warned that Australia’s Carbon Plan could strangle companies.

However, Abyd Karmali, global head of carbon emissions for Merrill Lynch, says financial pressures could be the way to make companies and individuals reduce emissions.

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