Brussels, 29/03/2011 (Agence Europe) - A further step has just been taken in the implementation of the revised directive on CO2 emissions trading in the EU (Directive 2009/29/EC) with the European Commission's adoption of rules governing the transitional free allocation of allowances to power stations in the new member states, as an exemption to the general rule beyond 2012. On Tuesday 29 March, the Commission formally adopted the rules which, in November 2010, received the unanimous approval of the representatives of the 27 member states on the EU's climate change committee. The decision is accompanied by a communication which provides additional guidance on the points the Commission will have to assess when it receives applications for free allocation to the power sector. It also provides clarification of a number of elements of the legal provisions.
From 2013, the start of the third ETS phase (2013-2020), the power sector will, as a general rule, have to buy all its allowances either at auction or on the secondary market. However, until 2019, 10 member states (Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland and Romania) may choose to allocate a limited number of allowances for free to power stations instead of selling them.
Those among the 10 above-mentioned member states which wish to make use of the exemption will have to submit an application to the Commission by 30 September 2011. The Commission must assess all applications and may reject them, in part or in whole, within a period of six months. These exemptions must not compromise the overall objectives of the ETS directive, which aims to contribute to tackling global warming, or be incompatible with EU state aid or internal market rules.
These exemptions to the rule were approved in the 2009 Climate/Energy package, much to the dismay of those, such as Greenpeace, which wanted the ETS to remain true to its environmental credentials.
Greenpeace has its sights on Polish intentions. Immediately the Commission communication was published, Greenpeace expressed doubts as to the legality of Poland's plans to claim exemptions for some of its new coal-fired power stations. Greenpeace points out that under the terms of the Commission communication, member states may exceptionally receive free emission allowances until 2019 if the “investment process was physically initiated” by the end of 2008. Yet, in letters to the Commission that have been leaked, the Polish government has stated that this would apply to almost 15,000 MW of new coal power capacity, including projects where a building permit has not yet been granted.
However, according to a legal analysis carried out by Jendroska Jerzmanski Bar & Partners Environmental Lawyers at the request of the NGO, Polish law does not allow “preparatory works” to be conducted on a new site and on the site of existing power plants without first obtaining a building permit. Brandishing this analysis, Julia Michalak of Greenpeace Poland calls on the European Commission “not to allow Poland to bend the rules to wriggle out of its obligations”. She adds: “Poland has a real potential for energy savings and renewables and there is no reason it should get a free ride on efforts to cut back coal”. (A.N./transl.rt)