Spain Rejigs CO2 Emission Plan in Favour of Coal

Spain Rejigs CO2 Emission Plan in Favour of Coal

Planet Ark

January 24 2005

Madrid - Spain has given extra pollution rights to coal-fired power stations at the expense of cleaner gas-fired plants in its final plan to limit carbon dioxide emissions, the Industry Ministry said on Friday.

Pressured by the coal industry and Endesa, the biggest power company which owns most of the country's coal-fired generating plants, ministers changed the allocation of emission rights on approving the plan for 2005 to 2007 at a cabinet meeting.

"The plan takes in some of Endesa's arguments," the company said in a statement.

The government's initial allocation, part of a European Union wide plan to limit greenhouse gas production and comply with Kyoto guidelines, gave coal-fired plants the right to emit a total of 148.7 million tonnes of CO2 over three years, divided into declining annual amounts.

In Friday's definitive plan, the total rose by 4.5 million tonnes to 153.2 million. To make up for the increase, the plan cut the emissions allowance for combined-cycle plants and reduced the reserve for new power stations that come on line.

Endesa and the number three power company, Union Fenosa, benefit from the extra emissions rights, while rival Iberdrola, which produces most of its power from natural gas and hydroelectric plants, loses out.

Gas Natural, which is just getting into the generation market, also loses.

In the plan, combined-cycle, gas-fired plants ended up with 66.4 million tonnes in emission rights for the three years, down from 67.5 million.

Iberdrola said the difference for it was only marginal -- 0.2 million tonnes less CO2 over the three years.

The ministry said the increase for coal burners had been possible "thanks to new (company) data and to using part of the rights reserved for new entrants".

Spain is currently producing some 40 percent more CO2 than allowed under its Kyoto emission limits, and its companies will have to buy rights from other countries that have excess to sell.

The emission allowance for the country's power generation industry as a whole is unchanged at 89 million tonnes in 2005, falling to 87 million by 2007, the ministry said.

The power industry expects to produce some 92 million tonnes a year of CO2, which implies it would have to buy extra rights at an estimated cost of some 10 euros a tonne.