Germany, Poland Oppose Stricter Emission Rules

Poland’s environment minister threatens to block higher carbon taxes.

Poland will block changes to the European Union’s Emissions Trading System and is confident that other Central and Eastern European states are opposed to more stringent emission rules as well.

The Polish environment minister Marcin Korolec told Environmental Finance last week that he sees no “perspective” for new regulations that increase the price of carbons.

I remember negotiations in 2008 when we were told we’re coming from a post communist country and don’t understand markets and that a market mechanism is the best we can have. And today, [the European Commission] is proposing something which is completely questioning the market mechanism.

Launched in 2005, the European cap-and-trade emissions system penalizes companies that emit more carbon dioxides than they have bought credits for with a fine and forces them to buy emission rights from businesses that pollute less.

While the system is designed to fight climate change, carbon prices have fallen so sharply in the last twelve months, by as much as 43 percent, that there is little incentive for companies to reduce their emissions. The bloc will be oversupplied with more than one billion permits by the next of this year, Bloomberg New Energy Finance calculated. Under current law, the surplus can be carried over into the next trading period.

Before the third phase in the trading system commences next year, the European Commission has proposed changes however, including a pan-European emissions cap and extending the program to cover aviation, maritime transportation and forestry, industries that are now exempt.

Austria and Germany have backed the Polish position in recent days. The former is especially critical of a carbon tax on airplanes’ emissions outside of European territory. Germany’s economy minister Philipp Rösler in Warsaw on Friday insisted, “It’s not the politicians’ task to interfere with the system.” He added, “Prices should be established by the market.”

Rösler is the leader of Germany’s liberal Free Democratic Party, conservative chancellor Angela Merkel’s coalition partner.