January 24, 2014 / 5:16 PM / in 4 years

Greece seeks special treatment to cope with carbon emission cost

* Recession-plagued countries need respite from emission rules, ministry says

* Tight carbon rules could fuel unemployment

ATHENS, Jan 24 (Reuters) - Greece is proposing recession-hit countries receive concessions under European Union environmental rules, hoping that it can curb the rising energy costs of its firms and improve their competitiveness.

Greece’s crisis-battered firms may lose an additional 33,000 jobs through 2020, unless special provisions are introduced in EU carbon emission rules to lower the costs, the energy ministry said in a statement on Friday.

The EU Commission already said on Wednesday it would scale back its long-term climate and energy ambitions because of tougher economic conditions. But Greece’s plea would go beyond the Commission’s plan.

“We propose that the European Emission Trading System identify specific ways to assist countries in an unprecedented economic recession and/or exposed to a higher level of EU-competition,” the energy ministry said in a separate document outlining its proposal, seen by Reuters.

Greece, which currently holds the EU’s six-month rotating presidency, hopes to rally other countries to its cause, a ministry adviser told Reuters on condition of anonymity.

Reeling from an austerity-fuelled recession that has wiped out nearly a quarter of economic output over the past six years, Athens has struggled to reduce firms’ energy costs.

It is worried its companies will lose competitiveness against firms in nearby countries not bound by EU carbon emission rules, a phenomenon also called “carbon leakage”.

The country’s state-run natural gas distributor DEPA is currently negotiating price cuts with its main supplier, Russia’s Gazpom, and has threatened to go to international arbitration if talks aren’t fruitful.

Greece’s main power producer PPC paid 147 million euros for emission rights in the first nine months of 2013, up from 0.9 million in the same period of the previous year, when EU emission rules had been softer. (Reporting by Harry Papachristou; Editing by Elaine Hardcastle)

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