NEWS RELEASE

28 February 2008

Europe getting nervous about cost of emissions trading

Europe Getting Nervous About the Cost of Emissions Trading While New Zealand Charges Ahead.

Due to growing concerns from Economic Ministers' and industry in Europe about the cost to their economies of emissions trading and potential job losses, the European Commission has been forced into a quick back-down on its plans to make the scheme universally tougher from 2013. (See clippings below)

In the absence of a global agreement, the European Commission is now promising to exempt energy intensive industries from the scheme or continue to give them free allocation of carbon permits instead of requiring them to purchase them. European leaders are concerned that if European business face higher costs from emissions trading compared to competitors from other countries, business will become uncompetitive and be forced to close in Europe.

European business leaders are seeking surety that this will not be the case and are seeking confirmation now that they will be shielded from emissions trading costs after 2012.

In contrast, according to the Greenhouse Policy Coalition, the Climate Change (Emissions Trading and Renewable Preference) Bill in New Zealand has very little recognition of these issues as it is currently drafted, which will result in a loss of industry and jobs in New Zealand.

Catherine Beard, executive director of the Greenhouse Policy Coalition which represents companies from many energy intensive sectors in New Zealand, says instead of trying to lead the world with the toughest emissions trading scheme imaginable, New Zealand should learn from the European experience.

"As the Bill is currently drafted there is no certainty for energy intensive industry that they have a future in New Zealand. They are unsure how much free allocation they will get (if any) to shield them from the increased costs the scheme will impose and any protection will be fleeting, with a linear phase out from 2013 despite what other countries are doing."

Catherine Beard said the Greenhouse Policy Coalition was urging all affected industry to make their concerns known by writing submissions on the Bill, which are due on Friday 29 February.

ENDS

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