In 2002 the European Union has issued guidelines for a trading system for
greenhouse gas emission allowances. DSM supports such a system since it will
help in reducing emissions of greenhouse gasses in the most cost efficient
way. Although the guidelines of the European Union focus on CO2 emissions, DSM
is convinced that such a system should be used for all greenhouse gasses. In
the proposed system, installations may not emit greenhouse gasses unless they
have 'emission allowances'. These allowances are allocated by governments of
the EU member states and are tradable within the entire European Union.
DSM is in favor of a trading system that is both effective and fair. Effective
in the sense that the system will favor energy-efficient over
energy-inefficient production. And fair in the sense that it does not lead to
unequal market conditions. New entrants and expansions of facilities must not
be discriminated against. Moreover, efforts of companies like DSM that started
increasing their energy efficiency at an early stage should be recognized. The
allocation principle for the allowances is therefore of crucial importance.
DSM is putting much effort in lobbying for an allowance and trading system
that is based on relative performance standards (as opposed to absolute norms
/ fixed cap). In the Netherlands, DSM is participating in the so-called
Benchmark Covenant. We are certain that the concept of benchmarking can
provide an objective basis for allocating allowances and we are therefore
supporting such a system on a European scale.
