Calls to clamp down on EU cheats

Leaders speak out against EU regulations.

Digby Jones, director general of the Confederation of British Industries, has called for the European Commission to toughen the way that it deals with countries that fail to comply with EU regulations.

Speaking at the Chemical Industries Association (CIA) Business Outlook Conference in London, Jones also suggested that the UK should take a different approach to dealing with EU regulations. He expressed particular concern at the UK government’s approach to emission trading.

The first phase of the EU Emission Trading Scheme (ETS) is scheduled to run from January 2005 to December 2007. Under the scheme, companies will be able to buy and sell allowances to comply with binding caps on their CO₂ emissions. EU member states have to submit proposals for how to deal with emission trading by 31 March 2004, a deadline which several countries are widely predicted to miss. Jones is certain that the emission trading scheme will only work if all member states join in. ’This means sorting out the cheats,’ he said.

The UK government has set up Europe’s first national allocation plan (NAP) for emission trading and the consultation on this ends on 12 March. Under Phase 1 of NAP, the government proposes to cut UK CO₂ emissions by 16.3 per cent (compared with 1990 levels) by 2010, double the expected reduction under the Kyoto protocol. In Phase 2, which will run from 2008 to 2012, things will get even tougher and the goal is to cut CO₂ emissions by 20 per cent by 2010. The CIA has complained that NAP ’risks saddling industry with input costs that may disadvantage the UK against even its EU competitors within the scheme’.

Jones also voiced his concerns about the draft EU chemical legislation, Reach (registration, evaluation and authorisation of chemicals). ’We must make sure that the European Commission acts in a way that is sensitive to what globalisation brings,’ he urged. ’Of course we want testing, but it has to be universally applied (including China and India).’ It also has to preserve EU jobs, he said. His greatest concern is that the Commission has the power to force countries to obey the directive. ’Do you see countries like the Czech Republic obeying it?’ he asked. ’We need Brussels to force countries to comply.’

Also speaking at the CIA conference, Barry Stickings, chairman of BASF plc, predicted that although Reach will have a relatively low cost impact on a company the size of BASF, the downstream industry will

really suffer. He gave the example of a computer chip manufacturer which may need to change its product every couple of years, but which won’t be able to because of EU regulation. ’The real impact on a company like BASF is innovation,’ he warned. ’If we can’t innovate new products for customers in Europe, then it will be done elsewhere.’

Emma Davies