Germany welcomes EU stance on its emissions plan

\"This gives a necessary incentive to revamp and modernise Germany\'s power stations, motivated by climate protection goals.\"

The Commission approved five national emissions trading plans outright while asking for certain corrections in those of three member states including Germany.

Modernisation of Germany\'s 100,000 megawatt (MW) power station capacity hinges on whether producers get a large enough CO2 quota to cover their future production, which Germany\'s proposal in March had catered for.

Trittin said if old and inefficient plants were replaced by modern equipment, pollution rights could be carried over for four years and obligations to cut CO2 at the new plants would be waived for 14 years after, as proposed.

Analysts say this is good news for coal-fired generators, which supply half of German electricity, as it gives them planning security as well as the option to devote some of their investments to gas-fired capacity.

Trittin said the EU decision allowed for the allocation of certificates on time to start the trading scheme, which is part of the EU\'s efforts to meet CO2-cutting targets under the Kyoto climate change protocol, next January as planned.

The Commission, in a statement, quibbled with certain provisions in Germany\'s plan allowing for changes to allocations for individual plants within the first 2005-2007 trading period, which it said discriminated against new market entrants.

It also queried Germany\'s proposed option to adjust allocations during that period for plants sharply reducing their emissions and for those receiving bonus payments for combined-heat and power production plants.

Utility EnBW said in a statement it maintained an option to go to court over the German plan, where it had felt short-changed and filed a formal complaint to the Commission.

\"Obviously external pressure led to substantive and legal concerns taking a back seat here, not least as a result of political pressure exerted by the German environment ministry on the Commission,\" it said.

EnBW relies more heavily on virtually emissions-free nuclear power, which is due to be phased out, so it will not benefit from new-for-old capacity quotas which will be awarded to companies replacing plants fired by rival fuel sources.