Hungary mulls legal action over slashed CO2 plan

A legal row is brewing as Budapest considers taking the Commission to court over its decision to slash the amount of carbon allowances that the country can allocate to companies under the European emissions-trading scheme. The Commission, on 16 April 2007, told Hungary to lower its proposed cap for industrial carbon dioxide emissions to 26.9 million tonnes annually from 2008 to 2012 � a reduction of more than 12% � making it the 16th country to face a cut by Brussels. Budapest said that it was surprised by the Commission's decision and that it could not rule out the possibility of taking legal action against the EU executive arm. "We are still assessing the ruling, but even at a first glance this reduction looks massive. Whether Hungary will take this issue to court I cannot yet tell, but this is something of a surprise," environment ministry official Jozsef Feiler said. Poland and the Czech Republic, which both saw their plans cut by Brussels last month, are also considering taking the Commission to the European Court of Justice. Slovakia, which had its requested annual allowances cut by one quarter, has already filed a complaint in February, arguing that the Commission's decision fails to take rapid economic growth into account and will harm industrial development. The Commission says that the cap reductions are necessary to consolidate the emissions-trading scheme, the EU's principal tool for fighting global warming and meeting its Kyoto commitments. "Today's decision reinforces the strong signal we gave with previous decisions that Europe is fully committed to achieving its Kyoto target and to making the Emissions Trading Scheme (ETS) a successful weapon for fighting climate change," Environment Commissioner Stavros Dimas said. "The Commission is assessing all national plans in a consistent way to ensure equal treatment of member states and to create the necessary scarcity in the European carbon market." Hungary's Feiler said that his country would give an official reaction next week, while, according to reports, the Czech Republic's Ministry of Industry and Trade spokesman, Tom� Bartovsk�, noted that his country has until 26 May to decide on legal action, hinting that it could co-operate with Poland and other countries to strengthen its negotiating position.