The European Commission has told Slovakia it must lower its carbon dioxide emissions by 14 percent. This is required under the Kyoto protocol. But if Slovakia complies it will anger a number of local companies. The subsidiary of the US Steel company has already filed a legal challenge with a European court.
The European Union has the power to allocate emission quotas for each of its members, including Slovakia. Slovakia is allowed to emit 30.5 million tonnes of carbon dioxide per year, down 14 percent from the original plan. The decision has upset bigger companies in Slovakia, among them the Kosice based branch of US Steel. I asked its spokesman Jan Baca why this quota reduction is a problem for the company:
"The original national allocation plan requested by Slovakia was well within the limit of the Kyoto protocol. If the EU's reduction is passed on through to the Slovak industry, it would not just harm the companies but also their employees through reduced wages and a loss of jobs."
The international Kyoto Protocol, aiming to force countries to cut down their greenhouse gas emissions, says that under so-called "flexible mechanisms", companies that pollute more than the amount allowed have to buy permits from those who in turn cut emissions more than needed. The EU says that the higher number of permits would become a generous form of state aid to companies that can sell the permits on the market later. Jan Baca:
"All the calculations for the carbon dioxide allowances that were requested [by the Commission] were based on the amount we need for our plant's steel production. We provided scientific accurate data as part of the Slovak National Allocation Plan for carbon dioxide emission based on the plant's planned production level. So, there was no excess built into our own request and even if we received the full amount requested we wouldn't have any excess to sell. We don't expect any trade with quotas after EU allocation."
You have filed a complaint with the European Court of first instance in Luxembourg. What are your expectations from such a complaint?
"The decision of the European Commission is illegal and discriminatory against US Steel and Slovakia. We are prepared to defend our rights no matter how long it will take."
The Minister of Environment, Laszlo Miklos, says that the actual quota has in fact been a hard won compromise:
"The whole of the EU must reduce its emissions by 8 percent. We are lucky because Slovakia has already fulfilled its obligations deriving from the Kyoto Protocol so we can also sell some credits. But everybody should understand that the whole idea of this system is about lowering the emission quotas and not increasing them. The Commission had the bread and the knife. You have to realize that it's made by representatives of bigger and older EU members who have no interest in offering Slovakia any extra permits that it could later sell."
Minister Miklos has informed the upset Slovak companies that the EU decision is final. He says they can fight it in court but warns there is little chance of winning.