First firm faces closure over emission licence

By Anna McLauchlin

Date: 08/09/05

A Spanish glass manufacturer has become the first company in the EU to face temporary closure for failing to comply with national law on the EU's emissions trading scheme.

Valencian glassware firm Vidrios Benignim, which employs 123 people, failed to apply for a permit to emit carbon dioxide by a 1 January 2005 deadline, although the Valencian regional government said that it sent notification in September last year.

Under Spanish law, companies have to apply for an emissions licence before they can join the national register and buy and sell their carbon credits.

As a result of the failure, the Valencian government ordered the company to cease its activity until further notice and is threatening a EUR 100,000 fine.

Sources at Vidrios Benignim claim that the company did not receive the notification to apply for a permit. The company has 15 days to present its case to the Valencian government.

Haikki Willstedt from green group WWF's climate change unit in Madrid, said that he welcomed the Valencian authority's initiative.

"It's a good thing that they are sending a strong signal that the law must be upheld, otherwise the whole system will break down," he said.

But the case, which is the first of its kind in Europe since the emissions trading scheme began on 1 January, highlights the difficulties that some small businesses have complying with the new laws.

According to the Dutch Advisory Board on Administrative Burden, Actal, the cost of complying with the trading scheme is around EUR 9,000 for a typical small installation, which may tempt some to try to opt-out of the system.

"Some businesses claim, and probably rightly so, that the costs are disproportionate," said Christian Egenhofer from the Centre for European Policy Studies (CEPS). "It's an issue that needs a solution but it is very difficult."

A Commission spokesperson said that the matter was between the company in question and the Valencian authorities, but added: "We would welcome Spain's efforts to implement the law."

She said that if Spain discovered that it had to change its allocation figures the EU might provide a "certain amount of flexibility" if there was a good reason. But a company's failure to apply for permits "does not sound like a good reason", the spokesperson added.

Article reports that the a Spanish manufacturer, the Valencian glassware firm Vidrios Benigänim, became the first company in the EU to face temporary closure for failing to comply with national law on the EU's emissions trading scheme.