Danes plan CO2 quotas for power sector

Rising electricity exports prompt minister to get tough on power-related CO2 emissions

Danish energy and environment minister Svend Auken has proposed introducing strict quotas on carbon dioxide emissions from the power sector in a bid to put the country back on course to meet its climate change targets.

In a statement issued on Wednesday, Mr Auken pointed to recent dramatic rises in electricity exports to neighbouring countries and said: "It will not be possible for Denmark to live up to its national and international targets on the reduction of carbon dioxide emissions without tough regulation." The government is standing by an ambitious commitment to reduce CO2 emissions by 20% by 2005 compared with 1988 levels.

Cold, dry weather in Sweden and Norway meant that Denmark's electricity exports to these countries rose from around 800 Gigawatt hours in 1995 to 15,400 Gigawatt hours in 1996 and maintained a relatively high level last year. CO2 emissions went up by a quarter. Electricity exports are expected to continue to be significant.

The government expects to discuss with countries that import Danish electricity whether they are prepared to take responsibility for associated CO2 emissions. However, on Wednesday, Mr Auken indicated that he thought this was unlikely: "We cannot expect that other countries are ready to take over the CO2 emissions that become attached to Danish exports," he said.

A detailed proposal for a CO2 quota system is due to be presented to parliament this autumn as part of a package of reforms to complete liberalisation of the Danish energy market in time for the EU's February 1999 deadline.

The quota system for CO2 will be loosely based on existing regimes for emissions of sulphur and nitrogen oxides, according to Ture Falbe Hansen, special energy advisor to Mr Auken.

Mr Hansen points out that setting up the sulphur and nitrogen oxides quota systems was relatively straightforward as the government dealt directly with only two companies - Elsam and Elkraft - which coordinate power supply in eastern and western Denmark respectively and which decide on emission allocations to individual power plants.

Designing the CO2 quota system is proving more complex because it will have to be applicable to any newcomers to the electricity market in Denmark. The quota systems for the other gases will also have to be redesigned.

The government hopes that companies will turn to investment in renewable energy sources to stay within CO2 quotas but they may also reduce electricity exports, which could be politically sensitive.

Follow Up:
Danish energy and environment ministry, tel: +45 33 927 600.

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