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ENVIRONMENT: Dispute over Aluminium Plant Resurfaces

Lowana Veal

REYKJAVIK, Apr 1 2008 (IPS) - Controversy has arisen yet again over the construction of an aluminium plant in Iceland. In this case the proposed plant will be located at Helguvik in the southwest, and will be powered by geothermal energy rather than hydroelectric power.

Geothermal energy is viewed as more environment-friendly than hydroelectric power, and the plant is designed to be relatively small, to produce 125-150 tonnes of aluminium a year to begin with, although eventually the owners intend to produce 250,000 tonnes of aluminium annually.

The Planning Agency found the environmental impact assessment for the project acceptable. However, they said that energy supply must be guaranteed, transmission lines agreed and emission quotas allocated before a construction licence could be given.

Energy supply is not completely guaranteed because, although the two energy companies concerned have said that they will provide energy to the plant, there is some degree of uncertainty whether some of the landowners will agree to utilisation of their resources for the Helguvik smelter.

The problem with the transmission lines is that they have to pass through nine municipalities, and all have to agree to having them on their land. There is also disagreement over whether the lines should be above or below ground.

The company involved, Landsnet, initially wanted the lines to be above ground as this is about four times cheaper than laying them underground. But the public, and some municipalities, want the lines to be hidden, especially as part of the route lies through popular recreational areas.

A chicken-and-egg scenario also exists in relation to emission permits. Emission permits were not allocated to Helguvik last year as the project had not progressed far enough. But now it appears that emission quotas must be allocated before the plant can go ahead.

Arni Finsson from the Iceland Nature Conservation Association (INCA) is blunt in his opinion about this. “In essence, the Century Aluminium Company is running very tough brinkmanship and may end up dictating Iceland’s climate policy as if Iceland were a banana-democracy.”

There is another complication. The conservation organisation Landvernd appealed to Environment Minister Thorunn Sveinbjarnardottir in October last year on the grounds that a new environmental impact assessment should be carried out that would jointly evaluate the effects of the smelter, the transmission lines to the plant, and energy sources that would be tapped for the plant.

The appeal tests a change in the latest environmental impact assessment legislation, dating from the year 2000, which allows for projects to be jointly assessed if they are contingent on one another and if more than one development is subject to an environmental impact assessment (EIA).

Sveinbjarnardottir has taken the matter up, although the process has taken much longer than expected.

The operators of the proposed smelter, Century Aluminium, disagree with Sveinbjarnardottir over the appeal matter, which they say should never have been taken up.

The two municipalities Reykjanesbaer and Gardur, in which the aluminium plant and associated infrastructure will be built, have a positive view of the project and said in February that construction could begin at the end of the month.

But they were told to wait because the risk assessment for the oil tanks and oil pipelines had not been completed. The Planning Agency reiterated the need for emission permits and a firm decision about transmission lines, and Sveinbjarnardottir said that nothing should be done until a decision had been made about the appeal.

Now, however, a construction permit has again been issued by Reykjanesbaer and Gardur municipalities, although none of the outstanding issues have been resolved. Why was this done?

Arni Sigfusson, mayor of Reykjanesbaer, told IPS: “The rules that municipalities must follow state that a construction permit cannot be granted until the Planning Agency has given a positive verdict on the EIA for the aluminium plant at Helguvik. The Agency did this. It did not issue any provisos with the agreement but said that it was desirable that certain issues could be resolved beforehand. The Ministry of Commerce also agreed with the Planning Agency’s verdict.”

He continued: “The risk assessment is not the type that could stop the development from proceeding. So we have followed all the relevant rules and regulations.”

INCA immediately launched an administrative appeal to annul the construction permit given out by the two municipalities. “We have to fight this on all fronts,” says Finnsson. “The Planning Agency, in its opinion, set three reservations: firstly, that uncertainty regarding energy provision be cleared; secondly regarding energy transport and power lines; and, thirdly, emission rights. The two municipalities have not addressed these three uncertainties.”

The outcome of the appeal was supposed to be announced between Easter and the end of March, but the information officer for the environment ministry, Gudmundur Hordur Gudmundsson, says that there has been some delay, and a decision is not now expected until the end of the week.

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