Dec 12 (Reuters) - European Union leaders neared agreement on a climate and energy package on Friday as power plants and factories won concessions on how many carbon emissions permits they pay for. Under the EU emissions trading scheme (EU ETS) power plants and manufacturers have to account for every tonne of the greenhouse gas carbon dioxide they emit with a permit called a European Union allowance (EUA). The EU supply of EUAs is unchanged, but east European power plants and EU manufacturers have won concessions on how many EUAs they get free and how many they buy through auctioning. Following are views on the impacts of auctioning, according to various protagonists. For related factbox double click here [ID:nLB277212] For related story double click here [ID:nLC110704] POWER PLANTS * In unrestricted energy markets -- for example Britain, Germany, Spain -- power plants can pass on almost the whole cost of EUAs to electricity consumers * They can pay for all EUAs, called 100 percent auctioning. But coal plants will lose out compared to low-carbon gas. * In regulated energy markets in much of east Europe power plants have to sell at a fixed price and so cannot pass on the full EUA cost * East European countries have lobbied for mostly free EUAs in 2013 and 100 percent auctioning not until 2020, to limit electricity price increases for consumers FACTORIES * Factories which don't compete outside Europe can pass on much of the EUA cost and so can face higher auctioning * Factories which compete internationally may not be able to pass on these costs, or risk losing competitive edge * Italy and Germany have lobbied for concessions for many companies to get 100 percent free EUAs through 2020 VIEWS 1. Green group, Stefan Singer, WWF -- * There's a principle of polluter pays. Giving free EUAs is a violation of that, and has given windfall profits to utilities * We have lost auction revenues for good environmental causes, now excluded from the system especially from Poland 2. Electricity analyst, Per Lekander, UBS -- * To me giving free EUAs is nothing but giving cash * It will definitely slow down investment in low-carbon energy. 3. Carbon analyst, Henrik Hasselknippe, PointCarbon -- * Whether or not you have auctioning doesn't affect the carbon price. That is set by supply and demand * Auctioning may pose a logistical problem for traders, given that there could be more than 100 auctions across the EU per year * Giving free EUAs is unlikely to increase price volatility
A destroyed bulldozer is seen at a burned area in the forest at the coastal town of Laguna Verde, some 115 km (71 miles) northwest of Santiago, in this March 6, ...
