EU reduces free allocation of allowances

Spanish Market: Emissions
05/09/13

London, 5 September (Argus) — The EU has limited allocation of free EU emission trading scheme (ETS) allowances by 5.7pc this year, compared with requests by member states, the European Commission announced after market close today.

Some 43pc of the total cap of allowances during phase 3 (2013-20) of the EU ETS will be allocated for free to industrial installations, equivalent to 6.6bn allowances. The iron and steel industry will receive the largest amount — at 1.5bn allowances through 2020. The cement industry will receive 1.1bn free allowances until 2020, while chemicals — including fertilisers — will receive 998.6mn free allowances.

Member-state authorities will now take necessary steps to distribute free allowances to installations through their accounts in the union registry. But companies will not receive their free allowances for one to three months, the commission added, depending on the administrative procedure in the respective member state. The allocation will enable industrial companies to know how many allowances they need in order to cover their compliance requirements for emissions in 2013.

The manufacturing industry will receive 80pc of its allowances for free in 2013, a proportion that will decrease in linear fashion each year to 30pc in 2020.

The correction factor has been made necessary by the existing carbon leakage list, the commission said. “With many sectors featuring on this list, many installations are eligible for a high level of free allocation.” The commission's decision on NIMs could be affected by a potential revision of this list. “If the carbon leakage list were to be shortened when it is revised in 2014, there would be fewer free allowances distributed to industry. Such a case might allow a review of certain aspects of the legal determination of the correction factor for the later years of phase three.”

The NIMs of a few installations in Germany and the Czech Republic were not entirely compliant with the allocation rules, the commission said. Those allocations are rejected until corresponding changes are made. But this should not “considerably” delay the process of adopting the final national allocation decision in those states.

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Brazil's energy transition spending drops in 2024

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Brazil's energy transition spending drops in 2024

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Brazil's Biomas advances forest restoration project

30/04/25

Brazil's Biomas advances forest restoration project

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DG Fuels eyes larger, later Louisiana SAF plant

29/04/25

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