IP/07/1274

Brussels, 31 August 2007

Emissions trading: Commission today adopted decision on Danish national allocation plan for 2008-2012

The European Commission today adopted the decision on the proposed Danish 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 total number of emission allowances proposed by Denmark equal to 24.5 million tonnes of CO2 per year. This is 2 million tonnes lower than Denmark's verified emissions of 2005. The plan will be approved under the condition that Denmark reduces companies use of credits from emission-reduction projects carried out in third countries, from the proposed 19% to 17%. 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: "Denmark has proposed a sound national allocation plan which we have accepted with only a minor change. The Danish government has understood the need to ensure that the Emissions Trading Scheme remains a successful weapon for fighting climate change. There are three more plans to be assessed. These will be finalised swiftly to ensure an orderly transition to the second phase of the EU ETS starting in 2008."

Assessment of the NAPs

Following the Commission's decisions in November 2006, January 2007, February 2007, March, April, May, June and July 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, IP/07/749 and IP/07/1131), Denmark is the 24th 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. Other assessment criteria relate to non-discrimination, EU competition and state aid rules, and technical aspects. To this end, the Commission is requiring the following change in the Danish NAP:

The proposed extent of companies' use of credits from emission-reduction projects carried out in third countries under the Kyoto Protocol's flexible mechanisms^[1] is not consistent with the rule that these mechanisms should be used to supplement domestic action on emissions. Denmark is required to ensure the use of these credits does not represent an addition to its annual allocation of more than 17.01 %.The Commission's approval of the plan will become automatic once Denmark has made the appropriate change.

See also:

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

http://ec.europa.eu/environment/climat/2nd_phase_ep.htm

Summary information on the 24 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. (All figures are annual)

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^[1] These mechanisms are known as Joint Implementation (JI) and the Clean Development Mechanism (CDM).

^[2] The figures indicated in this column comprise emissions in installations that come under the coverage of the scheme in 2008 to 2012 due to an extended scope applied by the Member State and do not include new installations entering the scheme in sectors already covered in the first trading period.

^[3] The JI/CDM limit is expressed as a percentage of the member state’s cap and indicates the maximum extent to which companies may surrender JI or CDM credits instead of EU ETS allowances to cover their emissions. These credits are generated by emission-saving projects carried out in third countries under the Kyoto Protocol’s project-based flexible mechanisms, known as Joint Implementation (JI) and the Clean Development Mechanism (CDM).

^[4] Including installations which Belgium opted to exclude temporarily from the scheme in 2005

^[5] Italy has to include further installations. The amount of additional emissions is not known at this stage.

^[6] Additional installations and emissions of over 6 million tonnes are already included as of 2006.

^[7] Verified emissions for 2005 do not include installations which the UK opted to exclude temporarily from the scheme in 2005 but which will be covered in 2008 to 2012 and are estimated to amount to some 30 Mt.

^[8] The sum of verified emissions for 2005 does not include installations which the UK opted to exclude temporarily from the scheme in 2005 but which will be covered in 2008 to 2012 and are estimated to amount to some 30 Mt.