Verheugen says EU green laws could hurt competitiveness

The EU’s plans on climate change must not come at the expense of European competitiveness, Günter Verheugen has warned.

In a letter to commission president José Manuel Barroso seen by this website, the commission vice-president says the EU should “develop a specific framework for energy intensive industries particularly exposed to international competition”.

“We have to recognize that, during the transitional period where Europe moves forward but other big emitting countries are not yet taking sufficient action, our environmental leadership could significantly undermine the international competitiveness of part of Europe’s energy intensive industries,” the letter says.

It adds that EU moves on emission caps could also “worsen global environmental performance by redirecting production to parts of the world with lower environmental standards”.

Verheugen argues that the energy-intensive sector should benefit from special exemptions such as dedicated state aid and “border tax adjustments”.

The vice president’s proposals come at a critical time for the EU’s policy on climate change, with Brussels set to launch a package of energy proposals in January. 

Verheugen’s letter outlines a ten-point action plan which he says is “necessary to develop a strategy that promotes environmental sustainability, improves security of energy supply and availability of affordable energy and bolsters competitiveness”.

Among other points, he says the EU must propose a “realistic unilateral target” reducing CO2 emissions by 2020 – suggesting that the targets should not be set over 15 per cent off 1990 levels.

This is less than the targets called for by green groups – the Climate Action Network, for instance, says industrialised countries need to reduce greenhouse pollution by 20 per cent by 2020.

But Verheugen’s letter argues that “unrealistic targets for the near future (e.g. 2020) could come at a significant cost because they do not take account of the rigidities of the energy system and the lifetimes of installed capacities”.

Verheugen adds that the trading scheme should include cars and also extend to other gases.

Finally, he says he wants to boost green technology development and “aggressively promote an industrial policy that will make Europe the frontrunner in environmental industries”.

The letter reflects the current policy shift at the European commission, which is seeking to “green” its economic policy after long considering competitiveness as being separate from environmental considerations.

But Verheugen’s letter was rejected angrily by the greens in the European parliament.

Green MEP Daniel Cohn-Bendit dismissed it as a “bizarre outburst” demonstrating the commissioner’s “divorcement from the environmental and economic reality”.

“The debate has long since moved on, even among many business leaders, but commissioner Verheugen appears to have been left behind to trundle out the same old arguments that protecting the environment should come second place to defending some outdated concept of competitiveness,” Cohn-Bendit argued.

“Quite apart from the environmental imperative of acting now, there is also a major competitive advantage to be gained by the EU in being ahead of the field,” he added.

The MEP added that “no commissioner should become the representative of a particular interest group and commissioner Verheugen must finally recognise that his is not the role of an industry lobbyist within this commission”.

The greens have said they will call for a plenary debate in parliament on the letter and its implications.

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