Ongoing delay clouds UK emissions allowances
Dispute between the UK and EC leaves businesses in uncertainty.
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Delays finalising emissions allowances that UK companies will be entitled to under European Union climate change regulations have left local businesses uncertain of the amount of pollution they will be allowed to emit.
The EU emissions trading scheme – an instrument devised to reduce the number of greenhouse gases released into the atmosphere – came into effect on 1 January. All participating countries allocated emissions rights to companies, which had to be approved by the European Commission.
The UK has yet to finalise its allocation after it was forced to revise its original submission to the commission of 736 million tonnes when it emerged this figure had been underestimated by almost 20 million tonnes.
The commission, however, was not happy with the revised figure and the two parties are still working to solve the dispute.
The delay has left businesses unsure of how many emissions allowances – which are intangible assets and need to be reflected in financial statements – they will be entitled to.
Defra this week moved to quell uncertainty, saying it would go ahead with allocating the revised number of allowances – 756 million – and would compensate for any cutbacks made by the commission by reducing allocations made to the electricity generation industry.
‘This should give industry confidence in the government’s intentions, and allow it to plan accordingly,’ Defra said.