Emissions SMMT News

Defra delays allow industry breathing space on emissions trading

16 March 2004 #Emissions #SMMT News

Delays in finalising emissions trading allocations have been welcomed by the motor industry. Defra’s announcement means that SMMT and its members will have extra time to persuade government that emission reduction targets in the National Allocation Plan (NAP) need to be realistic and possible.

To meet EU deadlines, a final NAP should have been published by the end of March. While an approved plan will be submitted to the EU, the final decision on emissions trading allocations will not be made until 1 October, leaving the door open for further consultation with the automotive sector.

SMMT chief executive Christopher Macgowan commented, ‘In February we urged government to review Defra’s plans. So we are pleased that the impossible targets set in the draft NAP and corresponding cost burden to UK manufacturers will be subject to further review. We look forward to some breathing space in which we can help government to understand fully the industry’s concerns.’

Under the original proposals, which were drafted as part of the UK’s implementation of EU Emissions Trading Scheme, qualifying sites would have been targeted with double digit percentage cuts in carbon dioxide emissions in just three years. One site would have faced a 40 per cent reduction. These are well in excess of those specified under EU proposals – or emission targets set out in the Kyoto protocol.

The targets would also have ignored the industry’s commitment to improve its environmental performance by driving down emissions within manufacturing sites by 15 per cent from 1995 levels by 2010. This was negotiated as part of the sector’s climate change agreement with government.

In its response to consultation on the draft NAP, SMMT expressed concerned that targets were set beyond the ‘technological potential’ of activities covered by the sector. This is important since the majority of CO2 emissions under the scope of the EU ETS from manufacturing sites in the motor industry come from boilers.

These are long lasting capital equipment, with an average lifespan of 30 years. At most sites, new units have been installed within the last decade limiting the potential for further significant cuts.

SMMT has also urged government to review developments in other member states to ensure that the scheme adopted in the UK does not damage the competitiveness of UK sites by imposing additional costs. An assessment of these implications, based on realistic energy projections and a review of the allocation methodology, should be conducted before final approval to the NAP is given.

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