Document summary
Energy and climate change are key priorities for EC legislators. Before end-2010 the EC appears likely to recommend tighter control of carbon emissions across all 27 EU member states, proposing an emissions reduction target of 30% relative to 1990 levels by 2020. S&P believes commitment to a 30% cap on emissions could push up the market price of carbon and potentially put pressure on the creditworthiness of carbon-intensive companies over the longer term if cost changes are significant and cannot be mitigated. This tighter standard could create a substantially different business environment for the region’s industry and increase compliance costs.