European Union regulators want to propose early next year rules on financial aid after 2012 for companies that would be inclined to relocate manufacturing to regions that aren’t subject to emission restrictions.

 

The measure is needed to “strike a reasonable balance” on support for electricity-intensive companies when the bloc’s carbon cap-and-trade program moves to the next phase as of 2013, Joaquin Almunia, the EU’s competition commissioner, said today at a conference in Berlin, as quoted by Bloomberg. The EU emissions-trading system, also known as the ETS, imposes carbon-dioxide limits on more than 11,000 utilities and manufacturers, including Royal Dutch Shell, the continent’s largest oil company and ArcelorMittal (MT), the world’s largest steelmaker.

 

The 27-nation EU, which has given away the majority of emission permits since it started its carbon-trading system in 2005, will sell majority of allowances in the next phase of the program beginning through 2020. EU emissions law also allows member states to adopt measures to compensate the companies for the costs relating to greenhouse-gas discharges passed on in electricity prices, or so-called indirect emission costs.