* EU Commission to propose curbs in carbon offsets
* Likely to rile China, other developing nations
(Adds Czech Republic, Italy)
LONDON, Nov 3 (Reuters) - European Union member states may
oppose new rules on how far their factories and power plants can
offset their carbon emissions, to be proposed by the European
Commission, environment ministries told Reuters.
The EU executive Commission is expected to propose in the
next two weeks curbs or an outright ban from 2013 on the most
common types of offsets.
Europe's emissions trading scheme caps planet-warming gases
emitted by industry, but allows companies to offset emissions by
paying for carbon cuts in developing countries, as a cheaper
alternative to cutting their own.
Shutting the main supply of offsets could push up carbon
prices, if agreed by a majority of member states at a meeting of
Commission officials and environment ministers later this month.
"From Poland's perspective, of course, key problem are those
installations which have to buy enormous amounts (of offsets),
price hikes would be problematic for them," said Urszula
Allam-Pelka, an official at Poland's Environment Ministry.
Allam-Pelka did not say that Poland would oppose a ban. East
European countries including Poland have previously disputed
their carbon caps seeing these as a handcuff on economic growth.
The EU Commission questioned in August the environmental
integrity of projects, mostly in China and India, which destroy
a greenhouse gas by-product called HFC-23. []
Such HFC projects accounted for about 60 percent of offsets
imported into the EU emissions trading scheme last year,
according to the Sandbag environmental group.
TRANSITION
An EU-wide decision will be made by majority vote, requiring
at least 14 of the bloc's 27 countries, later this month.
Several countries were still undecided.
"There is not yet a unified line by the German government,"
said a German environment ministry spokesman. The environment
ministry had sympathies with the EU plan but a joint stance must
be agreed for example with the economy ministry, he added.
An official at Spain's environment ministry said: "We
consider it essential to guarantee a suitable transition that
does not put in question the security of trading and carbon
markets."
A UK energy and climate ministry spokesperson said: "We
welcome the Commission taking a proactive role in this area."
A spokesman for the Czech environment ministry said that
they could support a ban: "The Czech Republic supports in
principle this step - a limitation or a ban. It will of course
depend on the concrete form of the measures," said Petr Kucera.
One possible alternative to a ban may be to discount HFC
credits -- for example making each worth half a carbon offset.
Italian industry sources said that they supported in general
the replacement of HFC credits, but that it would be impossible
to put that in place by the end of 2012, which they said would
put at risk more than 200 million tonnes of credits.
The Italian government appeared to be supporting their
position, the industry sources said. There was no immediate
comment from Italy's Environment Ministry.
An HFC ban would likely irritate developing countries, and
especially China, home to many such projects.
U.N. climate talks resume later this month in Cancun,
Mexico, and are deadlocked for example on how far rich countries
should pay for emissions cuts in the developing world. The Kyoto
offset scheme has been the main source of carbon finance so far.
