EUROPE: It to keep tariffs on light bulbs

European plans to lift tariffs on energy-saving light bulbs from China were put off for a year Wednesday as fears of Continental job losses prompted a protectionist backlash against Europe's top trade official, Peter Mandelson.

A split inside the European Commission led Mandelson to abandon proposals to end the duties of up to 66 percent this year in favor of a pledge to scrap the tariffs in 2008.

With European imports from China growing steadily, the dispute has become a part of the broader discussion about the impact of globalization and of the extent to which the 27-country European Union should use defensive trade measures.

But it also has repercussions for the EU's push to tackle climate change since the bloc wants to phase out the use of common incandescent light bulbs for domestic use within two years. European production can meet only 25 percent of demand for energy-saving bulbs, the commission estimates.

A senior European official, speaking on condition of anonymity, characterized the outcome as a compromise that averted a deep split with the commission, gave a clear decision to lift the duties but provided flexibility on timing.

After the hourlong discussion among the commissioners, Mandelson said: "The European Commission will recommend to member states that it is in the interest of the EU to remove these duties in the next year. This case has once again shown the complexities of managing anti-dumping rules in a global economy and against the broad range of EU interests."

The EU imposed the duties in 2001 and the 27 member countries must decide by mid-October whether to accept the commission's recommendation. At a meeting in July, Mandelson persuaded enough experts from EU member states to back a lifting of duties this autumn - despite German-led opposition.

Osram, a lighting manufacturer based in Germany, had called for the duties to remain in place.

The dispute has focused attention on the broader question of how to define the interests of European industry when so much production is being outsourced to China.

Osram, which produces fewer light bulbs in China than Philips of the Netherlands, had challenged the right of its rival to be considered as a European producer for such an anti-dumping case because of the quantity of its products manufactured in China.

That issue was not addressed by the decision Wednesday. But the commission is reviewing its trade defense strategy and drawing up a policy designed to deal with the complex issues raised by outsourcing of manufacturing to China.

Osram welcomed the announcement Wednesday, while Philips said it was disappointed that the termination of duties would delayed for a year.

The Foreign Trade Association, an umbrella group of European retailers and importers, said it was concerned that the light bulb tariffs might not be automatically lifted next year, even if the commission proposal is endorsed by EU countries.

"There is no guarantee that a further extension will not take place," said Stuart Newman, legal adviser to the association, who added that Osram or other companies might make further complaints next year that would have to be investigated.

Newman described the outcome as a "minor setback for Mandelson's support for free trade" and said the trade commissioner had faced internal opposition from Günter Verheugen, a German, who is the commissioner for industry. Verheugen previously supported a two-year extension of the duties.

"I understand there was political pressure from Verheugen and Barroso," Newman said, referring to José Manuel Barroso, president of the commission.

Osram said that the company "appreciates that our arguments regarding free trade and fair competition are being acknowledged by the European Union in the consultation."

Lourdes Catrain, a lawyer for Philips, estimated that the continuation of duties for a further year would cost the company €15 million to €20 million, or $20.5 million to $27.3 million.

Craig Burchell, head of international trade for Philips, said: "We acknowledge the fact that the commission has listened to Philips's arguments and decided to propose termination of the tariffs. But we are disappointed that they have not been terminated immediately because that is what the case merited.

"Free trade is about providing consumers with access and supplying the demand of European consumers," Burchell said. "In that sense the consumer has not won from this decision."

Johannes Laitenberger, chief spokesman for Barroso, said it was "a balanced decision following a proposal by the trade commissioner."

Laitenberger added, "The president's commitment to free, open and fair trade is well known." Ton van Lierop, spokesman for Verheugen, said the industry commissioner "thinks it is a good solution and is very satisfied."

Via: International Herald Tribune

By Stephen Castle

Johannes Laitenberger,light bulbs,Netherlands,Durao Barroso,China,energy saving,Lourdes Catrain,European Union,energyblog

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GERMANY: Energy Contracting, cutting Emmissions While Earning Cash

As the earth heats up and fuel prices soar, energy efficiency is becoming the new catchworld. A growing number of firms and individuals are investing in energy renovations to make money and cut emissions.

Eight years ago, the Staudinger High School in Freiburg, a town in southern Germany, decided its buildings needed an energy makeover. Built in 1970, the school was fitted with a heating system that could not be regulated in individual rooms, the lighting was antiquated, and water pumped continually through the toilets.

Teachers, parents and friends clubbed together to raise the 270,000 euros ($360,000) necessary for the energy renovation and signed a contract with the Freiburg Council, which administers the school. The council guaranteed the investors a percentage of the energy savings over the next eight years.

"We already knew about global warming back then and it was obvious that the situation had to change," explained Almut Winzel, a teacher at the school who invested 7,500 euros ($9,981) in the energy contracting project.

The firm Eco-Watt installed a computer-monitored heating system, new lighting and a water pump. As a result the school now saves around 25-30 percent of its electricity bill and has reduced water use by 65 percent.

"That saves the environment, precious resources and money," Winzel said.

Good return on investment

Winzel has received an average of 6 percent interest on her investment, which is more than the group originally hoped for.

Dieter Seifried, the general manager of Eco-Watt, said the project has been running extremely well.

"One of the issues with energy contracting is that you can't exactly calculate the savings at the beginning," he said, adding that even if the project had performed worse than expected, "we would have made around 3 percent."

Winzel said that when the energy contract runs out in a few months time, she plans to reinvest her capital in a new one. "It's just such a logical, simple way of reducing energy use that I absolutely want to continue supporting it," she said.

Even though energy contracting is a simple idea, it can be difficult in practice because there are so many factors to consider -- such as how to deal with fluctuating oil prices or changing weather patterns. The coldest winter in a century could wipe out the investment completely, whereas a mild winter could award investors an extremely high return.

Then there are changing usage patterns to consider -- such as if the school decides to start holding evening classes and potential saving are eaten up by the increased heating and lighting. All of these aspects need to be written into the contract.

Growing market for energy contracting

Energy performance contracting is proving so successful that even big business has entered the game. Siemens Building Technologies (SBT), for example, has been tendering for such contracts for more than 10 years.

"We've seen a growth of about 10 percent in the German market for such energy-efficiency solutions in buildings and demand is especially increasing in the last two or three years." said Mario Lieder, the head of SBT's Energy and Environmental Solutions division in Germany.

The company has been involved in energy contracting projects from prisons to swimming pools and the average energy saving is around 20 percent. Although, after an energy refit, the Reinkenheide Clinic in Bremenhaven managed to save 40 percent. Energy contractors are often called in because property owners, whether private firms or public authorities, lack the know-how or the investment capital for an energy refit.

Large expenditure not always necessary

But Mario Lieder from Siemens stressed that making buildings more energy efficient doesn't always require large sums.

"Sometimes it's not even necessary to invest in hard or software because you can optimize the building management system that already installed," he said.

According to Christoph Erdmenger from Germany's Federal Environment Agency, energy contracting is most suitable where there's significant energy use, such as in a building with several floors or a medium-sized company.

"It might not be viable to look into energy performance contracting on your holiday cottage," he said.

There are "millions of buildings throughout Germany" that would benefit from an energy refit, Erdmenger said.

Although Germany needs to use a variety of measures to reduce its carbon dioxide emissions, increasing energy efficiency in buildings "could make up several percent of this if implemented really consequently," he said.

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