Emissions trading: EU-wide cap for 2008-2012 set at 2.08 billion allowances after assessment of national plans for Bulgaria

The European Commission today adopted the decisions on the proposed Bulgarian national plans for allocating carbon dioxide (CO₂) emission allowances for 2007 and the 2008-2012 trading period of the EU Emissions Trading Scheme (EU ETS). Having become an EU member earlier this year, Bulgaria is required to draw up a plan for 2007 - the last year of the first trading period - in addition to a plan for the second trading period. The cleared annual allocation for Bulgaria for 2008-2012 is 42.3 million tonnes of CO₂ allowances, 37.4% less than 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 finalises the assessment process for the second trading period. We have now fixed the EU-wide cap for 2008 to 2012 at 2.08 billion allowances per year after reducing the number of allowances allocated in the second period by more than 10%. We have assured a robust market with real emission reductions which will constitute an important contribution to meeting our Kyoto target."

Assessment of the NAPs

Following the Commission's decisions in November 2006, January, February, March, April, May, June, July, August and October 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, IP/07/1131, IP/07/1274, IP/07/1566, IP/07/1612) Bulgaria is the 27^th national allocation plans (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 Bulgarian NAPs to be changed as follows:

For 2007

The allocation may not exceed 42.3 million allowances.
More information needs to be provided on the manner new entrants will be treated.
A complete list of all installations covered in the national allocation plan with the quantity of allowances intended to be allocated to each installation must be provided.
Several intended ex-post adjustments must be eliminated.

For 2008-2012

The annual allocation may not exceed 42.3 million allowances.
The total quantity of allowances needs to include a reserve for credits to be issued for projects reducing emissions in Bulgarian installations covered by the EU ETS sector and carried out under the Kyoto Protocol’s Joint Implementation mechanism. The allocation to installations carrying out the relevant activities needs to be lowered correspondingly.
More information needs to be provided on the manner new entrants will be treated.
A complete list of all installations in the national allocation plan with the quantity of allowances intended to be allocated to each installation must be provided.
Several intended ex-post adjustments must be eliminated.
The overall maximum amount of Kyoto project credits (CERs and ERUs) which may be used by Bulgarian installations for compliance purposes must be reduced to no more than 12.55% of each installation's allowance allocation.

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

Summary information (all figures are annual):

Member State	1^st period cap	2005 verified emissions	Proposed cap 2008-2012	Cap allowed 2008-2012 (in relation to proposed)	Additional emissions in 2008-2012^[1]	JI/CDM limit 2008-2012 in %^[2]
Austria	33.0	33.4	32.8	30.7 (93.6%)	0.35	10
Belgium	62.1	55.58^[3]	63.3	58.5 (92.4%)	5.0	8.4
Bulgaria	42.3	40.6^[4]	67.6	42.3 (62.6%)	n.a	12.55
Cyprus	5.7	5.1	7.12	5.48 (77%)	n.a.	10
Czech Rep.	97.6	82.5	101.9	86.8 (85.2%)	n.a.	10
Denmark	33.5	26.5	24.5	24.5 (100%)	0	17.01
Estonia	19	12.62	24.38	12.72 (52.2%)	0.31	0
Finland	45.5	33.1	39.6	37.6 (94.8%)	0.4	10
France	156.5	131.3	132.8	132.8 (100%)	5.1	13.5
Germany	499	474	482	453.1 (94%)	11.0	20^[5]
Greece	74.4	71.3	75.5	69.1 (91.5%)	n.a.	9
Hungary	31.3	26.0	30.7	26.9 (87.6%)	1.43	10
Ireland	22.3	22.4	22.6	22.3 (98.6%)	n.a.	10
Italy	223.1	225.5	209	195.8 (93.7%)	n.k.^[6]	14.99
Latvia	4.6	2.9	7.7	3.43 (44.5%)	n.a.	10
Lithuania	12.3	6.6	16.6	8.8 (53%)	0.05	20
Luxembourg	3.4	2.6	3.95	2.5 (63%)	n.a.	10
Malta	2.9	1.98	2.96	2.1 (71%)	n.a.	Tbd
Netherlands	95.3	80.35	90.4	85.8 (94.9%)	4.0	10
Poland	239.1	203.1	284.6	208.5 (73.3%)	6.3	10
Portugal	38.9	36.4	35.9	34.8 (96.9%)	0.77	10
Romania	74.8	70.8^[7]	95.7	75.9 (79.3%)	n.a	10
Slovakia	30.5	25.2	41.3	30.9 (74.8%)	1.7	7
Slovenia	8.8	8.7	8.3	8.3 (100%)	n.a.	15.76
Spain	174.4	182.9	152.7	152.3 (99.7%)	6.7^[8]	ca. 20
Sweden	22.9	19.3	25.2	22.8 (90.5%)	2.0	10
UK	245.3	242.4^[9]	246.2	246.2 (100%)	9.5	8
Member State	1^st period cap	2005 verified emissions	Proposed cap 2008-2012	Cap allowed 2008-2012 (in relation to proposed)	Additional emissions in 2008-2012^[10]	JI/CDM limit 2008-2012 in %^[11]
SUM	2298.5	2122.16^[12]	2325.34	2080.93 (89.5%)	54.61	-

^[1] 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.

^[2] 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).

^[3] Including installations which Belgium opted to exclude temporarily from the scheme in 2005

^[4] Due to Bulgaria's recent accession to the EU, this figure is not independently verified.

^[5] The German national allocation law contains a figure of 22 %, which relates to the allowances allocated free of charge, rather than the total cap.

^[6] Italy has to include further installations. The amount of additional emissions is not known at this stage.

^[7] Due to Romania's recent accession to the EU, this figure is not independently verified.

^[8] Additional installations and emissions of over 6 million tonnes are already included as of 2006.

^[9] 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.

^[10] 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.

^[11] 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).

^[12] 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. Furthermore, the emissions figures for Bulgaria and Romania are not independently verfiied.