EU Emissions Plan Faces Road Block

BRUSSELS (AP) -- An EU court ruling on Wednesday has raised doubts over how the EU operates a complex cap-and-trade system that aims to curb greenhouse gas emissions from the 27-nation bloc.

The EU's Court of First Instance said the EU's executive commission overstepped its powers in forcing Poland and Estonia to accept strict limits in carbon dioxide emissions for 2008-2012. The two countries brought the court appeal, claiming the quotas they were given are too low.

EU spokeswoman Barbara Helfferich told reporters Wednesday the ruling will force the EU Commission to redraft the plans for the two countries. She said the EU executive would try to make sure that this wouldn't devalue pollution permits sold on the EU-wide cap-and-trade market.

She added it was "much too early to say" what impact the rulings would have on the EU's cap-and-trade system, adding the Commission could appeal the court decision.

The ruling paves the way for other EU nations to protest their carbon cap if they disagree with the European Commission. The court said it was "for each member state, not the Commission to decide ... on the total quantity of allowances" it allocates nationally.

This challenges the EU executive's role as the arbiter of how many pollution permits countries should issue to heavy industry and electricity producers. Factories that want to pollute more must buy permits while cleaner plants can make money by polluting less and selling off permits they don't need.

The program covers 12,000 facilities -- from power units to pulp and paper plants -- and is supposed to provide a cheap way for the 27-nation bloc to meet its 2012 target of cutting carbon dioxide emissions by 8 percent from 1990 levels.

The allowances are traded on several European markets in London, Leipzig, Paris and Oslo.

More in Operations