Tag ETS

The European Commission adopted new measures to implement the judgment issued last April 2016 by the Court of Justice.

As reported in our previous  article, the judgment had invalidated the cross-sectoral correction factor (CSCF) used to allocate free allowances from 2013 to 2020 to stationary installations in the scope of EU-ETS, granting 10 months to the Commission to establish a new amount.

The recently approved Decision (linked at the bottom of this article), defines the new CSCF to be applied to all new allocations adopted after 1 March 2017: new entrants installations and increased capacity of existing ones will receive a reduced free allocation of about 5% compared to the current system.

As defined by the judgment, recalculations will not affect the allocations already approved, that will remain unchanged, except in case of variations in activity or capacity levels, as already defined by the current Regulation on monitoring and reporting of greenhouse gas emissions.

As already provided in Directive 2009/29/EC, the allocation of free allowances for district heating and high-efficiency cogeneration is not subject to the CSCF.

In the short term this Decision is not expected to have a material impact on carbon market.

The new correction factor will not be applied to the allocations in the period 2021 – 2030, that will follow the stricter linear reduction factor currently discussed in the European Parliament.

Link to the full text of the Decision (EU) 2017/126: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2017.019.01.0093.01.ENG&toc=OJ:L:2017:019:TOC

On 28th April 2016 the EU Court of Justice declared invalid the maximum annual amount of free allowances for greenhouse gas emissions determined by the Commission for the period 2013-2020.

The judgment is a consequence of the legal actions that a number of companies included in the scope of ETS brought before the courts in Italy, the Netherlands and Austria against the National Authorities entrusted with the allocation of GHG allowances. The subject of dispute was the calculation method applied to define the maximum annual amount of allowances.

As a consequence, the Cross Sectoral Correction Factor (CSCF) applied to preliminary allocations with Decision 2013/448/EU is not valid and shall be re-calculated on the basis of new data to be provided by the Member States; the maximum annual amount of allowances could be higher or lower than that thus far determined by the Commission.

The Commission is granted 10 months to establish a new amount, whereas the previous allocations of allowances cannot be called into question.

The full text of the judgment is available on the CURIA website http://curia.europa.eu/juris/celex.jsf?celex=62014CJ0191&lang1=it&type=TXT&ancre=

Italian Emissions Trading plants emitting less than 25.000 tons CO2/year and with a thermal energy input lower than 35 MW can opt-out from the ETS scheme and request to be admitted to a simplified management scheme for their CO2 emissions. The deliberation of the NAtional Competent Authority can be downloaded at the folowing link (Italian).

The deadline to present the request is Friday, 8th June 2012 @12 a.m.

See also on the same topic (only Italian):

24 04 2012 – Novità in arrivo per gli impianti ETS di dimensioni ridotte