European Carbon Emissions Trading Enters Crucial Second Phase

BRUSSELS, Belgium, January 10, 2006 (ENS) - Twenty-five European Union member states - 25 different national plans for reducing carbon dioxide emissions linked to climate change with different sets of expectations, different languages, different economic circumstances. To clarify the process, the European Commission Monday proposed a set of standardized tables for presenting information such as projected emissions and assumptions regarding fuel prices.

The Commission's guidance document is intended to help member states when they draw up national plans for allocating carbon dioxide emission allowances for 2008-2012 under the EU Emissions Trading Scheme (ETS).

These plans fix the total amount of carbon dioxide that can be emitted by all the installations in their country covered by the scheme as well as the number of emission allowances allocated to each individual installation.

This second trading period is important because it coincides with the five-year period in which the EU and member states must meet their targets for limiting or reducing emissions of greenhouse gases under the Kyoto Protocol on climate change.

Lime works in Croxton, Lincolnshire, England emitting clouds of greenhouse gases into the air (Photo courtesy FreeFoto)

The Commission says its experience with the first round of National Allocation Plans covering the 2005-2007 trading period, has shown that the plans need to be more transparent and easier to implement.

The Commission’s new guidance document proposes a set of standardized tables for presenting information such as projected emissions, assumptions regarding fuel prices and the reductions expected from other policies and measures.

Publication of the guidance document signals the Commission’s intention to examine the overall policy mix, including use of emissions trading, that member states propose in order to achieve their targets.

The Commission addresses the types of combustion installations that should be covered including the situation of "small" installations, those emitting relatively low amounts of carbon dioxide per year.

An ongoing revision of the rules for monitoring and reporting of emissions is intended to ease the administrative burden for small installations, the Commission said, hinting at further help as a result of its forthcoming review of the Emissions Trading Scheme.

Under the Emissions Trading Directive, the law which established the ETS, European Union member governments are required to draw up national allocation plans for each trading period.

Germany's coal fired Janschwalde power generating station pumps greenhouse gases into the air. (Photo courtesy Vattenfall)

The ETS, the world’s first and biggest international emissions trading scheme, began operating on January 1, 2005. Member states are required to notify their national plans for 2008-2012 to the Commission by June 30, 2006.

The Commission needs to approve the plans and has the power to require changes if it finds a plan incompatible with the agreed criteria.

The new Communication responds to a Council request from December 2005 asking the Commission to do its utmost to provide early guidance on preparation of the national plans.

June 30, 2006 is the deadline not only for member states to notify their national plans for 2008-2012 to the Commission but also for the Commission to report to the Council of Ministers and Parliament on experience to date with the Emissions Trading Scheme as a whole and to propose changes.

The guidance document is found at: http://www.europa.eu.int/comm/environment/climat/pdf/nap_II_guidance_en.pdf

More information on Emissions Trading and climate change policy is available at:

http://www.europa.eu.int/comm/environment/climat/emission.htm