EU tells Spain to set tougher emissions quota

(BRUSSELS) - The European Commission told Spain on Monday to set tougher greenhouse gas emissions quotas on their energy intensive industries.

The European Union's executive arm said that it could accept Spain's plans to allocate tradeable emissions quotas only if Madrid trimmed back its proposed cap for the 2008-2012 period.

The quotas are the cornerstone of the EU's innovative emissions trading system, under which industrial polluters can buy and sell unused credits.

The system is supposed to help the EU cut carbon emissions under the Kyoto Protocol, but its credibility has taken a beating recently because member states have allotted more permits to pollute than industrial plants need.

The commission said that Spain's emissions quota plan should not exceed 152.3 million tonnes of CO2 credits, compared with a cap of 152.7 million tonnes orginally put forward by Madrid.

Even though the commission demanded fewer emissions credits, EU Environment Commissioner Stavros Dimas praised Spain for its "ambitious determination" to reduce pollution.

Spain's "very solid allocation plan helps create the scarcity in allowances that is essential for the scheme's success in the second trading period from 2008 to 2012," he said.

The commission has already approved 14 member states' national allocation plans, conditional upon reductions of seven percent on average, and has launched legal action against Cyprus and Danemark for not putting a plan forward.