The European Commission on Wednesday assigned all countries in the trading block a cap on emissions as part of a reform package aimed at giving each member state “legally enforceable” polluting and renewables targets.

Key to the new policy is a reform of Europe’s Emission Trading System aimed at boosting the Europe-wide trade to include more polluters and more types of greenhouse gases. The reform package recommends adds an average 20 percent renewables content rule to each country’s target.

The Union had only last year made a 20 percent cut in emissions by 2020 the Continent’s goal. Now, it says any new global climate change agreement will signal an automatic switch to 30 percent emissions reductions by 2020.

Meanwhile, “All major CO2 emitters will be given an incentive to develop clean production technologies,” European commissioners said in a joint document, adding, “Thousands of European companies stand to gain.”

"Thousands of European companies stand to gain.”

The share of renewable energy in Europe is 8.5 percent. The EC said an average increase of 11.5 percent is needed to meet the target of 20 percent in 2020, hence the proposed legally enforcable targets for the European Pariliament to approve.

Citing energy security, Commissioner for Energy Policy, Andris Piebalgs, said tapping renewable energy "is an opportunity we cannot miss”.

The U.K. was alotted emissions cuts of gases other than carbon-dioxide by 16 percent of 2005 levels. It must keep its renewables quota at a minimum 15 percent or face consequences left vague. Belgiam, Denmark, Ireland and Luxembourg are asked to cut most at 20 percent.

Sweded, Latvia, Finland and Austria are assigned the largest renewables targets of 42 percent by 2020, a nod to the readiness of those economies for non-polluting energy.

The Union, meanwhile, will include more greenhouse gases it its carbon-dioxide trade and involve "all major industrial polluters". In good news for the price of carbon, pollution allowances on the market will be cut yearly to make room for traded emissions to be cut by 21 percent of 2005 levels within 2020.

For power plants, auctions of emissions allowances will start in 2013. Plant emitting less than 10,000 tonnes of carbon-dioxide annually will “not have to participate” in the money-making ETS.

Revenues from the ETS “should be used” on renewables and carbon capture and storage, the Commission said. Its researchers estimate revenues from auctioned allowances could amount to €50 billion annually.

Europe’s four-year-old carbon trading scheme covers some 10,000 industrial plants. Under the reformed system, the number is set to rise to include 40 percent of total emissions.

ws@scandoil.com