Prague feels the heat over €1.9bn carbon credit application
A Czech bid for almost €2 billion of free allowances under the EU’s Emissions Trading System (ETS) – equal to almost half Prague’s 2012 budget deficit – has drawn heavy fire from Brussels and European environmentalists, who say it will do little to combat CO2 emissions.
The application for 107 million free allowances (worth €1.88 billion) was made under the little known ‘10c derogation’ which exempts 10 of the newer member states from the ETS’s full auctioning rules until 2019, if the resulting funds are used to modernise, diversify, and clean up electricity generation. Without these, the allowances would simply constitute a market-distorting form of state aid. But this is exactly what Czech environmentalists claim would result from their government’s application for two-thirds of the 107 million allowances to go to the Czech energy monopoly ČEZ.
In an e-mail to EurActiv, Marta Machková, a spokeswoman for the Czech Environment Ministry, countered that “the investments aim at lowering coal consumption with higher energy efficiency.” “Projects have been assessed and recommended by independent energy auditors,” she said.
But she declined to identity the auditors, or respond to further questions about how such an investment in coal would aid energy diversification.