Emissions Trading: European Commission Approves Last Allocation Plan Ending NAP Marathon

The European Commission today accepted the Greek plan allocating CO₂ emission allowances to Greek companies for the 2005-2007 trading period. With today’s Decision, the Commission has completed its assessment of allocation plans for the first 2005-2007 phase of the EU Emissions Trading Scheme. The scheme allows for greenhouse gas emissions from the power sector and from energy-intensive plants to be cut at least cost to the economy.

Environment Commissioner Stavros Dimas said: “I am very glad that the Greek national allocation plan has been approved. With this approval, the emissions trading system is complete and we are looking forward to active spot market trading involving all Member States, which can begin once all national registries have been put into place. “

The Greek allocation plan

The Greek allocation plan covers 141 installations, and all installations qualify for trading. They will be allocated 223.3 million allowances (covering 223.3 million tonnes of CO₂) for the 2005-2007 trading period. The Commission approved the Greek plan following a commitment by Greece to remove a so-called ex-post adjustment. The plan is now in line with the conditions set out in the Emissions Trading Directive^[1].

2005-2007 NAP assessment completed

The Commission’s NAP crunch began some 14 months ago with Member States submitting the first national allocation plans in March 2004, and it ended today with the Decision on the Greek plan. Commissioner Dimas said: “Our discussions with Member States were facilitated by the fact that all parties trusted that we would assess the plans consistently. There has also been great willingness on all sides to make the EU emissions trading scheme a success.”

In total, the Commission has approved the allocation of about 6,57 billion allowances to a bit more than 11,400 installations for the trading period 2005 to 2007 (see attached table). It has demanded cuts in the number of allowances to be allocated in 14 of the 25 plans.

These cuts total over 290 million allowances, or about 4% of the notified number of allowances. In addition, the Commission has disallowed intended ex-post adjustments in 13 plans.

Closing the allocation cycle

Allocating approved allowances to companies via their issuance into an electronic registry account at national level is the final step of the allocation cycle. So far nine Member States have reached this stage, and about 50% of the allowances approved are already in circulation. Sixteen Member States still work on finalising technicalities necessary to launch the national registry and/or revise their allocation plans following demands by the Commission to cut the number of allowances.

Background

National allocation plans show how many CO₂ emission allowances Member States plan to allocate for the 2005-2007 trading period, and how many each plant will receive. The Commission's task is to scrutinise the plans against eleven allocation criteria. Criteria comprise consistency with the country's overall strategy to reach its Kyoto target and emissions developments, non-discrimination, respect for EU competition and state aid rules, and certain technical aspects. The Commission may accept a plan in part or in full. The Commission has now concluded its assessment of all 25 Member States’ plans.

For previous assessments and emissions trading, see:

IP/04/862, IP/04/1250, IP/05/9 and IP/05/269 as well as updated MEMO/05/84

More information on climate change policy is available at:

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

and on national allocation plans at:

http://europa.eu.int/comm/environment/climat/emission_plans.htm
Summary information per Member State for the 2005-2007 trading period (indicative table based on national allocation plans approved by the European Commission)

Member State	CO₂ allowances in mio. tonnes	Share in EU allowances	Installations covered	Registry functional	Kyoto target
Austria	99.0	1.5 %	205	Yes	-13%*
Belgium	188.8	2.9 %	363	No	-7.5%*
Czech Republic	292.8	4.4 %	435	No	-8%
Cyprus	16.98	0.3 %	13	No	-
Denmark	100.5	1.5 %	378	Yes	-21%*
Estonia	56.85	0.9 %	43	No	-8%
Finland	136.5	2.1 %	535	Yes	0%*
France	469.5	7.1 %	1,172	Yes	0%*
Germany	1,497.0	22.8 %	1,849	Yes	-21%*
Greece	223.2	3.4 %	141	No	+25%
Hungary	93.8	1.4 %	261	No	-6%
Ireland	67.0	1.0 %	143	No	+13%*
Italy	697.5	10.6 %	1,240	No	-6.5%
Latvia	13.7	0.2 %	95	No	-8%
Lithuania	36.8	0.6 %	93	No	-8%
Luxembourg	10.07	0.2 %	19	No	-28%*
Malta	8.83	0.1 %	2	No	-
Netherlands	285.9	4.3 %	333	Yes	-6%*
Poland	717.3	10.9 %	1,166	No	-6%
Portugal	114.5	1.7 %	239	No	+27%*
Slovak Republic	91.5	1.4 %	209	No	-8%
Slovenia	26.3	0.4 %	98	No	-8%
Spain	523.3	8.0 %	819	Yes	+15%
Sweden	68.7	1.1 %	499	Yes	+4%*
United Kingdom	736.0	11.2 %	1,078	Yes	-12.5%*
Total	6,572.4	100.0 %	11,428

Note: Figures do not take into account any opt-ins and opt-outs of installations in accordance with Article 24 and 27 of Directive 2003/87/EC.
* Under the Kyoto Protocol, the EU15 has to reduce its collective greenhouse gas emissions by 8% below 1990 levels during 2008-2012. This target is shared among the 15 Member States under a legally binding burden-sharing agreement (Council Decision 2002/358/EC of 25 April 2002). The majority of the Member States that joined the EU on 1 May 2004 have individual targets under the Kyoto Protocol with the exception of Cyprus and Malta, which have no targets.

^[1] Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community, published in the Official Journal L 275, 25 October 2003, p.32.