Lithuania decides to take EU to court over CO2 cut

VILNIUS, Aug 16 (Reuters) - Lithuania's government said on Thursday it took a formal decision to take the European Commission (EC) to the European Court of Justice over carbon dioxide emission allowances.

It became the seventh eastern European nation to take legal action against the EU executive, after the EC halved its original plan of 16.6 million tonnes to 8.8 million tonnes.

"We will need another two million tonnes of CO2 allowance more because of Ignalina nuclear power plant closure in 2009," environment minister Arunas Kundrotas told Reuters.

Lithuania was seeking now a CO2 allowance of 11.2 million tonnes, he added.

Lithuania has said it will have to produce more electricity from fossil fuel plants, a major source of pollution, after the closure of its remaining Soviet-built nuclear reactor.

Kundrotas said Lithuania is going to question the methods the EU executive body used to calculate the emission quota.

"The calculation can not be based on the national GDP growth, it should be based on the growth in certain sectors, which trade in emission allowances," the minister said.

"Allowances cut will hurt Lithuania's economy," he added.

Baltic neighbours Latvia and Estonia as well as larger eastern European peers Poland, the Czech Republic, Hungary and Slovakia have also decided to appeal to the EU court over the CO2 quotas they say is too restrictive for their economies.

Under the emissions scheme's first phase from 2005-07 the EU handed out too many emissions permits, prompting a carbon price collapse and underlining the need for tougher limits second time round.

The European carbon market limits emissions of heat-trapping carbon dioxide from heavy industry and is the 27-nation bloc's main tool to steer it towards its targets under the Kyoto Protocol on global warming.