The European Union said it has received all national carbon permit allocation plans needed to work out the number of allowances that companies in the bloc’s emissions market will get for free as of 2013.
The European Commission, the EU regulatory arm, needs to assess so-called national implementation measures from all 27 member states to calculate the final number of free carbon permits to be given to more than 12,000 facilities in the next period of the bloc’s carbon cap-and-trade program that runs to 2020. Last month the commission said Italy was the only country that hadn’t submitted its overdue national plan.
“Once this assessment is completed, the commission will communicate individually to each member state its decision with regard to the proposed preliminary allocation,” the commission said on its website.
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. The allocation of a dwindling supply of free permits will be done through carbon-efficiency benchmarks, based on the average performance of the top 10 percent of installations in 2007 and 2008.
To ensure that the total number of free allowances to be handed out to companies in the ETS doesn’t exceed the maximum amount allowed under the EU law, the commission may apply a reduction factor across industries in the program after assessing national bids.
In the third phase of the ETS, western European utilities will no longer get free allocations, while eastern European power plants will initially have to buy 30 percent of their permits at auctions. That figure rises to 100 percent by 2020.
Croatia, which will join the EU in the middle of next year and will participate in the ETS from Jan. 1, 2013, will submit its national allocation plan in autumn, the commission said.