IP/07/1131

Brussels, 18 July 2007

Emissions trading: Commission adopts decision on Cyprus' national allocation plan for 2008-2012

The European Commission today concluded the assessment of Cyprus' national plan for allocating carbon dioxide (CO₂) emission allowances for the 2008-2012 trading period of the EU Emissions Trading Scheme (EU ETS). The Commission accepted the plan on condition that certain changes are made, including a reduction in the total number of emission allowances proposed. The cleared annual allocation is 5.48 million tonnes of CO₂ allowances, 23% less than Cyprus had proposed. The Emissions Trading Scheme ensures that greenhouse gas emissions from the energy and industry sectors covered are cut at least cost to the economy, thus helping the EU and its Member States to meet their emission commitments under the Kyoto Protocol.

Environment Commissioner Stavros Dimas said: "Today’s decision brings us one step closer to finishing the assessment of Member States' CO2 allocation plans. There are four more plans to be assessed. These will be finalised swiftly after the summer break to ensure an orderly transition to the second phase of the EU ETS when it begins in 2008.”
Assessment of the NAPs

Following the Commission's decisions in November 2006, January 2007, February 2007, March, April, May and June 2007 (IP/06/1650, IP/07/51, IP/07/136, IP/07/247, IP/07/412, IP/07/415, IP/07/459, IP/07/501, IP/07/613, IP/07/667 and IP/07/749), Cyprus' is the 23^rd national allocation plan (NAP) for the 2008-2012 period to be assessed by the Commission.

NAPs determine for each Member State the 'cap,' or limit, on the total amount of CO₂ that installations covered by the EU ETS can emit, and specify how many CO₂ emission allowances each plant will receive.

The Commission is responsible for assessing Member States' proposed NAPs against 12 allocation criteria listed in the Emissions Trading Directive. The Commission may accept a plan in part or in full.

The assessment criteria seek, among other things, to ensure that plans are consistent (a) with meeting the EU's and Member States' Kyoto commitments, (b) with actual verified emissions reported in the Commission's annual progress reports, and (c) with technological potential for reducing emissions. In this context, the Commission is requiring Cyprus to reduce its proposed cap by 1.6 million tonnes of CO₂ equivalent per year, to 5.48 million tonnes.

Other assessment criteria relate to non-discrimination, EU competition and state aid rules, and technical aspects. In this regard, the Commission is requiring further changes to Cyprus' plan concerning the following issues:

• Several intended ex-post adjustments must be eliminated.
• Information provided on the manner in which new entrants will be able to participate in the EU scheme is insufficient.

The Commission's approval of the plan will become automatic once Cyprus has made the appropriate changes.
See also:

http://ec.europa.eu/environment/climat/emission.htm

http://ec.europa.eu/environment/climat/2nd_phase_ep.htm
Summary information on the 23 plans assessed to date:

Approved allowances for 2005-2007, verified emissions in 2005, proposed caps for 2008-2012, approved caps for 2008-2012, additional emissions covered in 2008 to 2012 and limit on the use of credits from emission-saving projects in third countries.