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27 September 2007 - German electricity company RWE and the national competition watchdog are close to a compromise in a dispute over RWE's policy of passing on the cost of carbon dioxide emission certificates.
Under the agreement, RWE would offer to auction below market prices a certain amount of electricity to large industrial clients over the next five years, according to reports in the Financial Times Deutschland and Frankfurter Allgemeine Zeitung.
In December, the Federal Cartel Office formally warned RWE not to use its dominant market position to pass on the full costs of certificates it needed to emit carbon dioxide, but to limit surcharges to a quarter of purchase costs.
European utilities had received emission certificates for free before they began being traded as part of the European Unions carbons emissions trading system.
The system, which puts a limit on the amount of carbon dioxide that energy intensive companies such as power suppliers can emit, has been in place since 2005.
If a power supplier overshoots its target, it must buy permits from companies which are still below their pollution targets.
But RWE got its 2005 certificates free of charge from the government, the cartel office explained, and should not have passed on the cost to customers.
Both RWE and the cartel office declined to comment, the reports said Thursday.
The cartel office's president, Bernhard Heitzer, would present the results of talks with RWE at a press conference later in the day, they added.
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