IP/07/247

Brussels, 26 February 2007

Emissions trading: Commission approves Spain's national allocation plan for 2008-2012

The European Commission today approved Spain's national plan for allocating carbon dioxide (CO₂) emission allowances for the 2008-2012 trading period of the EU Emissions Trading Scheme (EU ETS). The cleared annual allocation is 152.3 million tonnes of CO₂, which compares with the cap proposed by Spain of 152.7 million tonnes. Spain's plan for 2008-2012 covers additional emissions in sectors which did not report emissions in 2005 of roughly 6.7 million tonnes of CO₂. The approval is conditional on Spain making changes to three further aspects of its plan. The Commission decisions on national plans under ETS aim to ensure that Member States meet their emission commitments under the Kyoto Protocol.

Environment Commissioner Stavros Dimas said: "I welcome the Spanish Government's ambitious determination to use the Emissions Trading Scheme as a central component of its effort to comply with its Kyoto target. Its very solid allocation plan helps create the scarcity in allowances that is essential for the scheme's success in the second trading period from 2008 to 2012. The Commission will continue to assess all national plans in a consistent way to ensure that there is scarcity in allowances and that the EU meets its Kyoto target."

Assessment of the NAPs

Following the Commission's decisions in November 2006, January 2007 and February 2007 (see IP/06/1650, IP/07/51 and IP/07/136), Spain's is the 14^th 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.^[1] 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 Spain to reduce its proposed cap by 0.42 million tonnes of CO₂ equivalent per year to 152.3 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 changes to Spain's plan on the grounds that:

• The proposed extent of companies' use of credits from emission-reduction projects carried out in third countries under the Kyoto Protocol's flexible mechanisms^[2] is not consistent with the rule that these mechanisms should be used to supplement domestic action on emissions. Consequently Spain is required to limit the use of these credits to some 20 % of the allowed allocation.
• More information needs to be provided on how it will treat new entrants to the emissions trading scheme.
• A complete list of all installations has to be provided with the quantities of allowances that it intends to allocate to each installation.

The Commission's approval of the plan will become automatic once Spain has made these 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 14 plans assessed to date:

Approved allowances for 2005-2007, verified emissions in 2005, proposed caps for 2008-2012, approved caps for 2008-2012 and additional emissions covered in 2008 to 2012

---

^[1]. Directive 2003/87/EC, as amended by Directive 2004/101/EC.

^[2] These mechanisms are known as the Clean Development Mechanism (CDM), for projects carried out in developing countries, and Joint Implementation, for projects carried out in developed countries or economies in transition.

^[3] 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.

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

^[5] Additional installations and emissions of over 6 million tonnes are already included as of 2006.

^[6] 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 and 2012 and are estimated to amount to some 30 Mt.