A tough plan to auction off European carbon credits will, indirectly, make nuclear power a much more attractive option.
Leaked drafts of legislation, due to be launched by the European Commission on 23 January, reveal that Europe鈥檚 ailing trading scheme for carbon emissions is due for an overhaul.
The existing trading scheme enables companies to buy and sell permits to release limited amounts of carbon dioxide, but has so far failed to do much to help Europe make its promised 20 per cent cut in emissions from 1990 levels by 2020.
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Now the commission wants to slash the total-emissions cap for industrial plants by 21 per cent from 2005 levels. The plan is to replace the initial free ration of tradable permits with an auction. This should increase demand for the permits, driving up the price of carbon emissions, which should in turn reduce carbon pollution.
The new scheme, due to come into force in 2013, could greatly benefit the nuclear industry in nations such as the UK: last week, British politicians gave their backing to a new nuclear programme. The UK government argues that the industry would become economic if the price of a tonne of carbon emissions were to increase by 50 per cent 鈥� from 聙24 today to 聙36 in the future. By its calculations, around six large nuclear reactors could generate about 拢15 billion from selling carbon credits over 40 years.
鈥淣uclear power would be economic if the price of carbon emissions rose by 50 per cent鈥�
Although the carbon-emission price hike will be warmly received by the UK鈥檚 nuclear industry, it may face opposition from nuclear-sceptic countries like Germany, Belgium and Spain, which are already contemplating taxing their ageing nuclear reactors.
Environmental groups are ambivalent about the new plans. 鈥淎lthough the tighter rationing and auction of emissions permits is welcome, the aid it brings for nuclear is not,鈥� says Mark Johnston, a consultant to European environmental groups.
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