Governments Get EU Warning on Delays in Carbon Allocation Plans
The European Union urged 17 member states that failed to submit on time their plans on allocating free carbon permits to companies to explain the reasons for delay within 10 weeks or risk infringement proceedings.
Only 10 out of 27 EU member states have so far notified their so-called national implementation measures for the period from 2013 to 2020 to the EU, the European Commission said on its website. The commission needs national plans to calculate the final number of free allowances to be given to companies in the next period of the bloc’s carbon cap-and-trade program.
The allocation of a dwindling supply of free permits will be done through carbon efficiency benchmarks approved last year. In a procedural step preceding infringement procedures, the commission, the EU regulatory arm, called on the member states that lag behind to “clarify the situation” by March 1 and avoid further delays after the original deadline for submitting the national measures expired on Sept. 30.
“Depending on the replies and the progress with the notifications, the commission will consider possible further action,” it said.
The EU, which has given away the majority of emissions allowances since it started the program in 2005, will sell the majority of them in the next stage of its emissions trading system, or the ETS, that starts in 2013. The bloc will auction around 60 percent of the total number of permits next year, according to the commission estimates, and the proportion will increase in coming years.
Average Performance
EU carbon benchmarks for free allowances are based on the average performance of the top 10 percent of installations in 2007 and 2008. The most efficient installations in a given industry won’t need to purchase more permits, while those that emit more than the benchmarks will need to buy pollution rights.
In the third phase of the ETS west European utilities will no longer get free allocations, while east European power plants will have to buy 30 percent of their permits at auctions. That amount rises to 100 percent by 2020.
The European carbon cap-and-trade program, the world’s largest, imposes pollution limits on more than 11,000 utilities and manufacturers, including Electricite de France SA, Europe’s biggest power generator and Royal Dutch Shell Plc, the continent’s largest oil company. Those that emit less than their quota can sell surplus permits. One allowance gives the right to discharge one metric ton of carbon dioxide.
Countries that have notified the commission of their planned allocation of free permits to companies are Cyprus, Estonia, Ireland, Latvia, Lithuania, Malta, Poland, Romania, Slovakia and the U.K., the commission said.
To contact the reporter on this story: Ewa Krukowska in Brussels at ekrukowska@bloomberg.net
To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net
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