IP/07/667

Brussels, 15 May 2007

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

The European Commission today concluded the assessment of Italy'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 Italy'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 195.8 million tonnes of CO₂ allowances, 6.3% less than Italy 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: "Europe is fully committed to achieving its Kyoto target and to making the Emissions Trading Scheme a successful weapon for fighting climate change. Today's decision, like our previous ones, sends a strong signal of that commitment. The Commission is assessing all national plans in a consistent way to ensure equal treatment of Member States. This is how we have assessed Italy’s plan, and we will apply the same standards to the remaining plans.”

Assessment of the NAPs

Following the Commission's decisions in November 2006, January 2007, February 2007, March, April and May 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 and IP/07/613), Italy's is the 21^st 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 Italy to reduce its proposed cap by 13.2 million tonnes of CO₂ equivalent per year, to 195.8 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 Italy's plan concerning the following issues:

• More information needs to be provided on how Italy will treat new entrants to the emissions trading scheme.
• Italy needs to include combustion installations (e.g. chemical crackers) covered by all other Member States in their allocation plans.
• Several intended ex-post adjustments must be eliminated.
• The maximum overall amount of Kyoto project credits – credits from emission-saving projects carried out in third countries under Kyoto Protocol rules - which may be used by operators for compliance purposes may not represent more than approximately 15 % of its annual allocation.

The Commission's approval of the plan will become automatic once Italy 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 21 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.

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