France tables EU-Poland carbon trade compromise

EU presidency proposes free allowances for power stations in coal-intensive or poorly interconnected regions

Power stations in eastern Europe could continue receiving free carbon allowances after 2012 under a compromise proposal tabled by the French EU presidency this week to overcome opposition to plans to overhaul the EU's carbon trade scheme.

Poland has repeatedly insisted on free allowances for its power sector, winning support from other eastern European and Baltic states (EED 06/11/08). This has put it on a collision path with other member states. But last week Polish prime minister Donald Tusk said EU governments were getting closer to a common position (EED 14/11/08).

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