Brussels, 27/04/2011 (Agence Europe) - Rules on how free emission allowances should be allocated from 2013 to industrial installations taking part in the EU Emissions Trading System (EU ETS) have been adopted. On Wednesday 27 April, the European Commission formally adopted the decision establishing harmonised rules and efficiency references, which will make free allowances subject to a system of best performance criteria (in terms of CO2 emissions) in sectors or sub-sectors that are deemed to be exposed to a risk of “carbon leakage” in third countries. Free allowances, up to the reference levels established, is the system that will apply to those installations to help them cope with competition from the industries in third countries which do not place the same emissions reduction constraints on their industrial installations.
Last December, representatives from the member states at the EU's “climate change” committee approved these rules (EUROPE 10280). Parliament and the Council did not formulate any objections and adoption was simply a formality. Connie Hedegaard, the European commissioner for climate action was, however, keen to point out the scope of this new initiative and pointed out in a press statement that, “This decision represents a milestone in the reform of the European carbon market... Benchmarks give industry clear indications of what is possible in the respective sectors in terms of low carbon production, and provide an advantage to the most carbon-efficient installations”.
As stipulated in the revised EU ETS Directive (Directive 2009/29/EC of 23 April 2009 amending Directive 2003/87/EC), the benchmarks are in most cases based on the average emissions performance of the most efficient 10% of installations in a given sector or sub-sector in the EU. This average has been derived from verified real-life production data in recent years (2007-2008) provided by the industry sectors themselves. The benchmarks are expressed in tonnes of carbon dioxide (CO2) per tonne of product produced. The benchmarks will be multiplied by the historical production data for a given installation to determine how many free allowances it will receive. The Commission points out that the quotas in free allowances will differ from sector to sector. In most sectors installations will receive free allowances covering on average up to 70-80% of their 2005-2008 emissions. Installations can make up the shortfall in free allowances by improving their emissions performance or by buying additional allowances, using allowances banked from the current trading period ending in 2012, or using international offset credits, the Commission points out.
Member states will now collect the necessary activity data for each relevant installation on their territory. Based on this data, preliminary free allocation per installation will be calculated for each year until 2020. (A.N./trans.fl)