* Italy says industry struggling with carbon emissions cap
* European Commission says caps not renegotiable
* European carbon market nears two-day fall of 9 percent
(Adds quotes, data at market close)
By Pete Harrison and Gabriela Baczynska
BRUSSELS, Sept 24 (Reuters) - France, Italy and several
other European Union countries weighed their chances of haggling
up their EU carbon emissions quotas on Thursday, one day after
Poland and Estonia successfully challenged theirs in court.
The two east European countries won their appeal on
Wednesday for more generous caps on industrial emissions in the
Emissions Trading Scheme (ETS), the EU's main tool for
ratcheting down gases blamed for climate change. []
The ruling by the European Court of First Instance, the
bloc's second highest court, threw European carbon markets into
uncertainty and the International Emissions Trading Association
(IETA) asked countries to refrain from challenging their own
quotas.
European carbon markets closed 4 percent lower, leading to a
two-day fall of nearly 9 percent. []
"We call on all member states to hold back from attempting to
make use of a loophole that simply has to be closed for the
carbon market, and European climate policy, to continue on a
sound footing," IETA said in a statement.
Poland was cautious about its victory on Thursday, weighing
the possibility that any re-negotiated quota might be based on
emissions data from 2008, a year when industry's emissions fell
as it slowed down because of the economic crisis. []
European Environment Commissioner Stavros Dimas confirmed
that would result in little change to the cap. "It would appear
unlikely that there would be any material difference concerning
the total number of allowances," he said in a statement.
Elsewhere there was little sign of restraint, with Italy
complaining about its quotas and Lithuania and the Czech
Republic optimistic about their own pending court appeals.
[]
European Commission spokeswoman Barbara Helfferich played
down the chances of renegotiation.
"There is no way of increasing the allowances," she told
Reuters. "The ceilings have been established already."
Double-click here for possible scenarios []
CARBON COSTS
Lithuania and the Czech Republic, which are pursuing a
similar appeal to Poland, were encouraged by Wednesday's court
decision.
"We will need more carbon emissions due to shutting down
Ignalina nuclear power plant at the end of this year, and
switching electricity generation to fossil power plants,"
Stasile Znutiene, at Lithuania's environment ministry, told
Reuters.
Italian Prime Minister Silvio Berlusconi had already written
last week to the European Commission pointing out the country's
difficulties with meeting carbon quotas, an Italian government
spokesman said.
Italy did not ask to renegotiate the quota, but asked for
"intervention to reach a shared solution", said Paolo Bonaiuti.
A shortage of carbon permits could cost Italy about 500
million euros ($736 million) in the short term, mounting to a
total of 800 million by 2012, said another Italian government
official.
Several European Union countries, including France, are also
discussing the possibility of increasing carbon emissions
permits in a reserve fund for new businesses entering the ETS,
an EU diplomat said.
"The question of the reserve for new entrants is being asked
in several EU countries, among them France, but at this point
there is no formal demand of reviewing the allocation plan," the
EU diplomat said.
(Additional reporting by Julien Toyer in Brussels, Michael
Szabo and Nina Chestney in London, Nerijus Adomaitis in Vilnus
and Jan Korselt in Prague, editing by Timothy Heritage and
Gerard Wynn)
