According to HN daily, Czech Republic will ask EU to increase annual CO2 allowances for the 2008-2012 period to 101.9m tons from 97.6m t, what is increase of 4.4%.
Our view:
Previously the Ministry of Trade and Industry planned 7% increase. This proposal still needs to be approved the Government and the deadline for submission is set for the end of this year, although it should have been ready by end June 2006. While the proposal argues with the GDP growth, higher energy consumption, we believe that the CO2 allowances limit for individual countries may be reduced following report surpluses in 2005 – that includes also the Czech Republic.