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Emissions trading: Commission adopts decision on Hungary's national allocation plan for 2008-2012
Commission Européenne - IP/07/501 16/04/2007
Brussels, 16 April 2007
The European Commission today concluded the assessment of Hungary'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 Commission accepted Hungary's national plan on condition that certain changes are made, including a reduction in the total number of emission allowances proposed. The cleared annual allocation is 26.9 million tonnes of CO2 allowances, 12.4% less than Hungary had proposed. Hungary's plan covers additional emissions in sectors which did not report emissions in 2005 of roughly 1.4 million tonnes of CO2. 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 reinforces the strong signal we gave with previous decisions that Europe is fully committed to achieving its Kyoto target and to making the Emissions Trading Scheme a successful weapon for fighting climate change. The Commission is assessing all national plans in a consistent way to ensure equal treatment of Member States and to create the necessary scarcity in the European carbon market. This is how we have assessed the plan decided today, and the same standards will be applied to all others."
Assessment of the NAPs
Following the Commission's decisions in November 2006, January 2007, February 2007 and March 2007 (IP/06/1650, IP/07/51, IP/07/136, IP/07/247, IP/07/412 and IP/07/415, IP/07/459), Hungary's is the 19th 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 Hungary to reduce its proposed cap by 3.8 million tonnes of CO2 equivalent per year to 26.9 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 Hungary's as regards the elimination of several intended ex-post adjustments. Furthermore, if guarantees for allocations beyond 2012 foreseen in the plan are maintained, the Commission would need to examine them under EU state aid rules. The aid in such guarantees is likely to be found incompatible with the Treaty. Under the Directive the Commission would also disallow the implementation of allocation guarantees when the third allocation plan is assessed.
The Commission's approval of the plan will become automatic once Hungary has made the appropriate changes.
Summary information on the 19 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.
. Directive 2003/87/EC, as amended by Directive 2004/101/EC.
 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.
 Including installations which Belgium opted to exclude temporarily from the scheme in 2005
 Additional installations and emissions of over 6 million tonnes are already included as of 2006.
 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.
 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.