Bowe (PSE). – Madam President, I welcome this agreement. It is absolutely essential to ensure the workability of the emissions trading system when it starts in January 2005. I want to congratulate the rapporteur on the work he has done. I have seen a lot of rapporteurs and he really has done a very good job. He has secured an agreement with the Council which is a practical compromise and which will reap considerable environmental rewards whilst providing for industry a great deal more certainty than the original proposal.

I am happy that we have been able to retain the cap on the number of credits issued. It is a sensible solution allowing Member States to monitor and control the market and make sure it is not flooded. On specific issues, I believe we have been able to persuade the Council of the need for greater reflection on whether to include domestic projects. The guidelines we have laid down there are useful.

As regards 'sinks' I feel we have the best possible deal: a prohibition on companies using credits from land-use projects and carbon forest sinks until at least 2008. We will find this is a very difficult thing to calculate and we need time to look at it more closely.

Concerning big hydro and nuclear projects, it seems disappointing if we wanted the allowances for such projects excluded permanently from the scheme, but in reality Parliament has been able to ensure that the projects and the take-up within the European scheme are at least in line with Kyoto and the World Commission on Dams and the Marrakech Accords. It is not really a bad result.

Our message to EU governments is clear: real, environmental improvement through emissions reductions must be brought about by long-term, sustainable effort at home and not by cheap, ill-advised and potentially detrimental projects in the poorer countries. Member States: we will be watching you!