Analysis of national allocation plans for the EU ETS

The EU ETS is a Community-wide scheme established by Directive 2003/87/EC for trading allowances to cover the emissions of greenhouse gases from permitted installations. The first phase of the EU ETS runs from 1 January 2005 to 31 December 2007. Each Member State must develop a National Allocation Plan for the first phase stating: · the total quantity of allowances that the Member State intends to issue during that phase; and how it proposes to distribute those allowances among the installations which are subject to the scheme In this paper twelve of the national allocation plans have been analysed and compared to the criteria stated in the EU Directive. The twelve allocation plans analysed are: the Austrian, the Danish, the Finnish, the German, the Irish, the Lithuanian, the Luxembourg, the Dutch, the Swedish, the British and the draft Flemish (Belgium) and Portuguese. Generally most countries have allocated generously to the trading sector. The allocation has often been based on future needs. For most sectors the allocation is higher than current emissions. Many countries will have to make large reductions in the non-trading sector and/or buy credits through JI- and CDM- projects in order to fulfil their commitment according to the EU burden sharing agreement of the Kyoto Protocol. In many of the allocation plans the emission reducing measures in the non-trading sector is poorly described and the credibility of the measures are hard to determine. Two sectors have been analysed in more detail, the energy and the mineral oil refining sectors. Figures presenting allocation vs. current emissions for those sectors are given for those countries where data was available in the allocation plan. The energy sector has been considered to have the best possibilities to pass on costs for the allowances to the consumers and hence the allocation to this sector is often more restricted than the allocation to other sectors. The mineral oil refining sector is more exposed to competition from installations outside the system and hence more sensitive to extra costs. This sector is also affected by other Community legislation that will lead to higher emissions. Some allocation plans have clear infringements to the rules given in the Directive 2003/87/EC. Many countries have suggested ex post adjustment of allocation due to different circumstances, which might violate Article 11.1 to the Directive. This paper also contains a list on the status of the allocation plans as of 18 August 2004 and the comments to the allocation plans given in the Commission decisions taken upon them. As of today, 18 August 2004 not all Member States have submitted their final national allocation plan to the Commissions and not all of the plans submitted have been assessed by the CommissionThe EU ETS is a Community-wide scheme established by Directive 2003/87/EC for trading allowances to cover the emissions of greenhouse gases from permitted installations. The first phase of the EU ETS runs from 1 January 2005 to 31 December 2007. Each Member State must develop a National Allocation Plan for the first phase stating: · the total quantity of allowances that the Member State intends to issue during that phase; and how it proposes to distribute those allowances among the installations which are subject to the scheme In this paper twelve of the national allocation plans have been analysed and compared to the criteria stated in the EU Directive. The twelve allocation plans analysed are: the Austrian, the Danish, the Finnish, the German, the Irish, the Lithuanian, the Luxembourg, the Dutch, the Swedish, the British and the draft Flemish (Belgium) and Portuguese. Generally most countries have allocated generously to the trading sector. The allocation has often been based on future needs. For most sectors the allocation is higher than current emissions. Many countries will have to make large reductions in the non-trading sector and/or buy credits through JI- and CDM- projects in order to fulfil their commitment according to the EU burden sharing agreement of the Kyoto Protocol. In many of the allocation plans the emission reducing measures in the non-trading sector is poorly described and the credibility of the measures are hard to determine. Two sectors have been analysed in more detail, the energy and the mineral oil refining sectors. Figures presenting allocation vs. current emissions for those sectors are given for those countries where data was available in the allocation plan. The energy sector has been considered to have the best possibilities to pass on costs for the allowances to the consumers and hence the allocation to this sector is often more restricted than the allocation to other sectors. The mineral oil refining sector is more exposed to competition from installations outside the system and hence more sensitive to extra costs. This sector is also affected by other Community legislation that will lead to higher emissions. Some allocation plans have clear infringements to the rules given in the Directive 2003/87/EC. Many countries have suggested ex post adjustment of allocation due to different circumstances, which might violate Article 11.1 to the Directive. This paper also contains a list on the status of the allocation plans as of 18 August 2004 and the comments to the allocation plans given in the Commission decisions taken upon them. As of today, 18 August 2004 not all Member States have submitted their final national allocation plan to the Commissions and not all of the plans submitted have been assessed by the Commissio