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Shell warns Europe on CO2 permits

Daily Telegraph: Shell warns Europe on CO2 permits

By Roland Gribben
Last Updated: 1:09am BST 10/04/2008

Shell has threatened to halt investment in Europe if the EU pushes ahead with contentious plans to charge for carbon emission permits as part of a €60bn (£48bn) climate change programme.

Christian Baime, a Shell France director, delivered the warning at a debate organised by the European Parliament. He expressed concern that any move to auction permits would be costly and added: “It’s impossible. So there will be no more investments by Shell in Europe.”

He indicated that the $250m in profit being made from refining and other operations covered by permits could be wiped out by a charging regime, making Europe unattractive for further investment.

The Shell declaration represents an escalation in the battle between industry and EU regulators on tougher controls on emissions to meet a 2020 target to reduce greenhouse gases by 20pc compared with 1990 levels. Shell says the allocation of permits should not be considered as a revenue raising opportunity.

A spokesman said: “Shell does not favour auctioning of allowances in the first phase of a system because the impacts on the industries and firms covered by the system are highly uncertain.”

Other companies have been privately dropping hints that investment could be frozen unless there were concessions and have warned of a steep jump in the cost of energy.

http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/04/10/cnshell110.xml

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