* Italy asks to renegotiate carbon emissions cap
* Several EU states may seek more permits from reserve fund
* European Commission says caps not renegotiable
* European carbon market nears two-day fall of 10 percent
By Pete Harrison and Gabriela Baczynska
BRUSSELS, Sept 24 France, Italy and several
other European Union countries weighed their chances of haggling
up their EU carbon emissions quotas on Thursday, one day after
Poland and Estonia successfully challenged theirs in court.
The two east European countries won their appeal on
Wednesday for more generous caps on industrial emissions in the
Emissions Trading Scheme (ETS), the EU's main tool for
ratcheting down gases blamed for climate change. [ID:nLN487837]
The European Court of First Instance ruling, the bloc's
second highest court, threw European carbon markets into
uncertainty and the International Emissions Trading Association
asked countries to restrain from challenging their own quotas.
European carbon markets were down 4 percent, heading for a
two-day fall of 10 percent. [ID:nLO167619]
"We call on all member states to hold back from attempting to
make use of a loophole that simply has to be closed for the
carbon market, and European climate policy, to continue on a
sound footing," IETA said in a statement.
Poland was cautious about its victory on Thursday, weighing
the possibility that any re-negotiated quota might be based on
lower emissions data from 2008, impacted by recession, resulting
in a tougher rather than more lenient cap. [ID:nLO149486]
But elsewhere there was little sign of restraint, with Italy
pushing for a review of its quotas and a sign that France too
was looking too ease the pressure of carbon costs.
European Commission spokeswoman Barbara Helfferich played
down the chances of renegotiation.
"There is no way of increasing the allowances," she told
Reuters. "The ceilings have been established already."
Double-click here for possible scenarios [ID:nLO236872]
Italian Prime Minister Silvio Berlusconi had already written
last week to the European Commission asking to renegotiate the
caps on his country's carbon dioxide emissions, said an Italian
government official, who welcomed Wednesday's ruling.
"The cap assigned to Italy was excessively low and we have
difficulty meeting it as our industry is already very efficient,
especially our power generation system," the Italian official
said. "We are making no proposal, just looking to discuss this
problem with the Commission."
A shortage of carbon permits could cost Italy about 500
million euros ($736 million) in the short term, mounting to a
total of 800 million by 2012, the official added.
Lithuania and the Czech Republic, which are pursuing a
similar appeal to Poland, were encouraged by Wednesday's court
"We will need more carbon emissions due to shutting down
Ignalina nuclear power plant at the end of this year, and
switching electricity generation to fossil power plants,"
Stasile Znutiene at Lithuania's environment ministry told
Several European Union countries, including France, are also
discussing the possibility of increasing carbon emissions
permits in a reserve fund for new businesses entering the ETS,
an EU diplomat said.
"The question of the reserve for new entrants is being asked
in several EU countries, among them France, but at this point
there is no formal demand of reviewing the allocation plan," the
EU diplomat said.
(Additional reporting by Julien Toyer in Brussels, Michael
Szabo and Nina Chestney in London, Nerijus Adomaitis in Vilnus
and Jan Korselt in Prague, editing by Timothy Heritage and