Eon warns on EU emission cuts

Financial Times, 30 June 2009 - The European Union risks driving industry out of the region if it continues to push for deeper cuts in carbon dioxide emissions than other economies, according to the chief executive of Eon , one of the world's biggest renewable energy companies.

Wulf Bernotat, Eon's chief executive, told the Financial Times that the EU was imposing higher energy costs on its industry than competing regions, and criticised the US for doing “basically nothing” to cut its carbon dioxide emissions.

He added that if there were no international deal to cut emissions agreed at the Copenhagen meeting at the end of the year, the EU would have to rethink its plans to take a lead in fighting the threat of climate change.

“It is a European political issue whether the European Union can continue to lead the policy process if the rest of the world is not joining in,” he said.

“We are adding additional costs to our industries, and if other countries don't follow, then those industries will move to lower-cost regions.”

Other European companies have made similar warnings, but his words are striking coming from a leading investor in renew-able energy.

More than 70 per cent of Eon's power generation is coal and gas-fired, but it is also a leading player in renewable energy.

It is the world's fifth-largest generator from wind power, and it expects that its project pipeline for new wind farms will make it the largest in the US.

Over the next three years it plans to invest €4bn ($5.6bn) in renewables, making it one of the world's biggest investors in green energy. It is investing in some ground-breaking projects, including the world's biggest offshore wind farm, the London Array in the Thames estuary and the world's biggest onshore wind farm at Roscoe in Texas, which will be completed this autumn.

However, Mr Bernotat argued that without an international agreement on reducing greenhouse gas emissions, the European effort to encourage renewable energy could become unsustainable. “There should be a a cap-and-trade system that provides sufficient incentives for a low-carbon future,” he said.

“At Copenhagen, we will see whether some countries are prepared to make significant steps in that direction, and whether the US is serious about joining in. Without that, Europe has to think whether it can continue for long to burden its industry with extra costs and make it uncompetitive.” He added that the EU would continue to need nuclear power and coal, with equipment to capture and store its carbon dioxide emissions, to meet energy needs.

“Coal is widely used around the world – it is the main fuel for power generation in many countries – and we have the resources to last for hundreds of years. And this coal will be burned: maybe not in Europe, but in China and India. So it is in the interests of global society to find a solution to that, because people will use coal: that's for sure.”

Author Ed Crooks Publication Date 1 Jul 2009 Document Type News articles Issue/Topic Business Role/CSR Electricity Utilities Energy & Climate Region Europe Company E.ON AG Include In RSS Business & Sustainable Development News Corporate Social Responsibility News Energy & Climate News