Helsinki (23.08.2002 Juhani Artto) In October 2001 the European Commission published a draft Directive to govern carbon dioxide emission trading between enterprises within the European Union. The trade unions representing industrial workers in Finland and the country’s largest central trade union organisation SAK see major flaws in the draft.

The organisations are unable to accept the idea of not rewarding enterprises that have already voluntarily reduced their carbon dioxide emissions, or alternatively of failing to penalise enterprises that lag badly behind in their emission solutions. As Finnish enterprises have invested more than the European Union average in emission reduction, failure to recognise this achievement would distort competition conditions and be unfair to top performers.

The Commission proposes to begin emission trading in 2005-2007 by making its application mandatory at power plants generating more than 20 MW, oil refineries, paper, pulp and paperboard factories, iron and steel plants and certain construction material production facilities. In Finland this would cover about 60 per cent of total carbon dioxide emissions, while in the European Union as a whole the coverage would be about 50 per cent.

The Commission reckons that once the new system is in place internal emission trading would save the European Union some EUR 2.1 billion. The expectation is that the market mechanisms will guide emission reduction investment in a cost-effective manner.

Erkki Vuorenmaa, the President of the Finnish Metalworkers Union, says that neither Finland nor the European Union should implement their own emission trading directives at this stage, or at least not within the context of the Commission draft. Vuorenmaa insists that the most important meaningful objective is to encourage the USA, Australia, Canada and China, and possibly also Russia, to join the Kyoto Climate Protocol.

Vuorenmaa proposes that Finnish stakeholders should hold a round table conference seeking a consensus on how to interpret environmental legislation. Representatives of public authorities, industry, labour market organisations and other NGOs and political movements would participate.

Most of the major business associations, including the forest and engineering industry organisations, are critical of the Commission draft. Their criticism largely resembles the views of the trade unions. The construction industry umbrella organisation is even opposed to the whole idea of emission trading.

Positive responses to the draft directive have come from Fortum - Finland’s largest biggest electricity producer and distributor - and from the oil and gas industry association. Leading environmental organisations also support the draft.