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=

The European Commission adopted a decision on Member States’ national implementation measures (NIMs) for phase three of the EU Emissions Trading System (EU ETS).

The actual number of allowances handed out each year will be adjusted by a ‘cross-sectoral correction factor’ which will vary each year. This will ensure that the total amount handed out for free does not exceed a maximum set in the ETS Directive. The correction factor will be 5.73 % in 2013 and will thereafter increase gradually to 17.56% in 2020.

It is now for Member State authorities to take the necessary steps to distribute the free allowances to installations via their accounts in the Union registry. This will take around one to three months depending on the procedures to be followed in each Member State.

The original article is available in the EC web page.

Starting from 1 January 2013, the European Emissions Trading System entered its third phase of implementation. Italy applies the new regulation defined by the European Directive 2009/29/EC with the Decree n. 30 of 13 March 2013, that defines simplified procedures for small installation that requested the exclusion (also called “opt-out”) from the ETS.

The Italian Competent Authority, with Deliberation 16/2013,  has recently approved a list of 166 small emitters and their annual emissions cap, defining the new requirements and procedures to fulfill. To be compliant to the system, small emitters shall submit the Monitoring Plan, in the new simplified format, no later than 30 September 2013.

On 28 June 2013, the European Commission issued a proposal for maritime transport regulation on the monitoring, reporting and verification of carbon dioxide emissions from shipping sector. The COM(2013) 480 Proposal was drawn  after a public consultation occurred during 2010 (SWD(2013) 237 final), involving the main stakeholders: private companies, ship-owners, ports operators, trade unions, EU Regional and National public authorities and NGOs.

The Regulation lays down rules for the emissions management of ships arriving at, within or departing from ports under the jurisdiction of a Member State – transport by 1 July 2015 – in order to promote the reduction of CO2 emissions from maritime transport in a cost effective manner.

At present the European Emissions Trading System includes the most energy-intensive industries and aviation. The extension of the system to the maritime sector would significantly broaden the binding system to reduce GHG emissions in Europe.

On Friday 16/11/2012, the Italian National Authority for the Emissions Trading Directive has published on its web site the deliberation n.27/2012, which establish the obligation for the Italian ETS plants to present the emissions monitoring plan in the new EU format for the period 2013-2020.

The Italian plants have time untill January 31st 2013 to fill in the excel template and sumbit it to the ETS committee. Some more days are needed to decide for the ‘opt-out’ plants, which are still waiting a final decision for their ‘exclusion’ from the standard obligations.

Untill the 31st of december 2012, the monitoring of emissions continues as of deliberation 14/2009 as modified by 14/2010.

For more information about the EU monitoring dispositions and templates: EU ETS monitoring

The European Commission has adopted this summer the new regulations on monitoring and reporting of greenhouse gas emissions and on verification and accreditation of verifiers under the EU Emissions Trading System, that will rule the third trading period of the EU ETS starting in January 2013.

The Italian ETS committee has approved the list of plants that fall within the scope of the Emissions Trading Directive, including the pre-allocation of free allowances (subject to EC review).

Operators of ETS plants will be asked in the coming months, to submit further documentation to align with the new regulation.

The contribution of the Environmental Ministry to the growth plan being discussed in these days by the Government after the summer holidays, has been published last week on the Ministry official website.

The framework described in the document is quite comprehensive and confirms the effort to put Italy back in track with the decarbonization of the economy addressed by several EU Directives. Various policies are already in place, but suffered in the past months of many delays in their actuation, due to conflicts of competences between different Governmental departments.The current technical Government could effectively help to solve several impasses.

For more information about the contribution (in Italian): http://www.minambiente.it/home_it/showitem.html?item=/documenti/comunicati/comunicato_0438.html&lang=it

“This is a big step ahead: for the very first time we have legally binding energy efficiency measures. Europe is now much better placed to achieve its 20% energy efficiency target for 2020”, Energy Commissioner Günther Oettinger stated.

“The measures will reduce our energy bill while generating further growth and jobs. They stimulate investments and make our energy using products more efficient.”

“The European Parliament and the Council have played a constructive role in finding a compromise. It also shows Europe’s ability to act in difficult economic times.”

Yesterday evening, the European Parliament, the Council and the EU Commission reached a political agreement on the Energy Efficiency Directive. Today, Coreper endorsed the agreement. European Parliament and the Council still need to give their approval.

To read the complete memo from the EC, click here.