EU: Hungary must produce less CO2

The EU said Monday that Hungary must decrease the emission of  between 2008-2012 by 12.4 percent, rejecting an earlier proposal by Budapest.

The European Commission reduced the amount Hungary can produce during that period to 26.9 million metric tons of CO2 a year. The country had originally proposed setting an annual limit of 30.7 million tons.

EU member countries are required to set limits on the amount of CO2 that industry can emit and the commission must then approve it. Companies that stay below these limits can sell carbon permits to participants that have overshot their quotas, creating a trading system.

The EU has said repeatedly that stricter limits are needed for the emission permit program to work and create financial incentives for polluters that force them to release less greenhouse gases.

The commission decides whether or not to approve the plans based on how close a country is to meeting their emission reduction targets under the Kyoto protocol agreement, on projected economic growth and based on carbon emissions for 2005. In 2005, Hungary emitted 26 million tons of carbon dioxide, way below the limit of 31.3 million tons set for the period.

Fellow Central European countries Slovakia and the Czech Republic also have had their plans cut, and both appealed, arguing the decision did not take into account rapid economic growth. EU regulators also made deep cuts to the Polish proposed maximum. Poland, the EU's third-largest carbon polluter, said it would analyze the EU decision before deciding on an appeal.