The European Commission will propose this week auctioning permits to emit greenhouse gases after 2012 in a package of measures to fight climate change, despite protests from business, its chief said today.
"Allowances will be auctioned, with revenues going to member states, but any EU company will be allowed to buy allowances in any member state," Commission President Jose Manuel Barroso said in a speech prepared for delivery at investment bank Lehman Brothers in London.
His remarks confirmed predictions by European Union sources that the EU executive plans to force firms to buy at least some pollution permits, rather than receiving them for free as they do now under a scheme that has handed out windfall profits.
Mr Barroso said implementing the EU's entire green energy plan will cost about 0.5 per cent of gross domestic product a year, equivalent to about €60 billion.
EU sources have said about 20 per cent of permits to emit carbon dioxide (CO2) - the main gas blamed for global warming - are to be auctioned in 2013, fewer than Brussels originally envisaged, rising to 100 per cent in 2020.
Europe's top business lobby, BusinessEurope, attacked the plan last week, saying that auctioning permits could hurt European industry in global competition.
Mr Barroso also confirmed that energy-intensive industries might be given an easier regime for greenhouse gas emissions.
"In the case of need ... we should also be ready to continue to give the energy intensive industries their ETS (emissions trading scheme) allowances free of charge," he said.
The Commission might also "require importers to obtain allowances alongside European competitors, as long as such a system is compatible with World Trade Organisation requirements," Mr Barroso said.