BRUSSELS, Belgium (AP) — The European Commission, bowing to industry concerns, said Thursday it was ready to exempt Europe's steel, chemical and power sectors from having to compensate for the environmental damage they cause — at least for a while.
The EU was keen to see a global deal to reduce greenhouse gas emissions and, until a deal was in place, the EU would hold back on plans to force more companies to pay to pollute from 2013, European Commission President Jose Manuel Barroso told European business leaders.
Last month, the EU executive said it would demand that major polluters buy all the carbon permits they need, which would raise the cost of manufacturing by charging them up to euro50 billion (US$74 billion) a year and likely hike electricity prices by 10-15 percent.
Until now, companies get most of their carbon permits for free — and they say extra costs will make it harder for them to compete against rivals in countries that are less active in curbing climate change such as the U.S., China and India.
Barroso's comments aimed to soothe those worries.
''Ultimately, the best solution is an international (emissions trading) agreement,'' he said.
''But in the absence of an international agreement, we should be ready to look at interim solutions for energy intensive industries. For example, receiving their (emission trading) allowances free of charge, or requiring importers to obtain allowances alongside European competitors.''
Barroso added, ''This is the most we can do for our energy-intensive industries.''
The EU's carbon cap-and-trade program aims to cut overall releases by giving a financial incentive for companies to cut back on carbon because they can sell the permits they do not use. If they need to run plants for longer or fail to turn to cleaner technology, they need to buy more permits.
The EU insists that the costs of climate change are far outweighed by the damage a warmer climate will cause. Reducing energy use and turning to renewable energy sources could also slim down Europe's huge bill for oil and natural gas imports.
Barroso was rewarded for his address with a round of warm applause from hundreds of European business leaders attending a two-day conference devoted to climate change.
The key goals of the EU energy package are to cut the EU's greenhouse emissions by at least 20 percent and raise use of renewable energies to 20 percent of overall energy use by 2020. The emissions cut will reach 30 percent if a global climate change accord is reached.
C. Boyden Gray, the U.S. ambassador to the European Union, urged Europeans to consider delaying their targets to 2030, from 2020. If 2020 remains a target ''the emphasis will be on sectorial agreements, given the time pressure,'' rather than on globally negotiated climate change norms.
''The technology that is going to be developed between 2020 and 2030 is going to be huge,'' he said and will allow for an international approach.
