Eu Utslipp Trading System ( Eu Ets ) Direktivet

Revisjon for fase 4 (2021-2030) Europa-kommisjonen presenterte i juli 2015 et lovforslag om å revidere EUs utslippshandelssystem (EU ETS) for perioden etter 2020. Dette er det første trinnet i å levere på EUs mål for å redusere drivhusgasser gassutslipp med minst 40 innenlands innen 2030 i tråd med 2030 klima - og energipolitikkrammen og som en del av sitt bidrag til Paris-avtalen. Øke tempoet i utslippsreduksjonene For å oppnå minst 40 EU-mål, må sektorene som omfattes av ETS, redusere sine utslipp med 43 sammenlignet med 2005. For dette formål vil det totale antall utslippsutgifter falle med en årlig rate på 2,2 fra 2021 og utover, sammenlignet med 1,74 i dag. Dette utgjør en ytterligere utslippsreduksjon i sektorene som omfattes av ETS, på rundt 556 millioner tonn i løpet av tiåret, som tilsvarer de årlige utslippene i Storbritannia. Bedre mål for karbonlekkasje Forslaget videreutvikler forutsigbare, robuste og rettferdige regler for å løse risikoen for karbonlekkasje. Å revidere systemet med gratis tildeling for å fokusere på sektorer som har størst risiko for å flytte produksjonen utenfor EU, rundt 50 sektorer i alt. Et betydelig antall gratis kvoter legges til side for nye og voksende installasjoner. Flere fleksible regler for bedre å justere antall gratis kvoter med produksjonstall Oppdatering av referanser for å gjenspeile teknologiske fremskritt siden 2008 Det forventes at rundt 6,3 milliarder kvoter vil bli tildelt gratis til selskaper i perioden 2021-2030. Finansiering av lav-kullinnovasjon og modernisering av energisektoren Flere støttemekanismer vil bli etablert for å hjelpe industrien og energisektoren til å møte innovasjons - og investeringsutfordringene i overgangen til en lav-CO2-økonomi. Disse inkluderer to nye fond: Innovasjonsfondet som utvider eksisterende støtte til demonstrasjon av innovativ teknologi til gjennombrudd av innovasjon i industrien Moderniseringsfondet tilrettelegger investeringer i modernisering av kraftsektoren og bredere energisystemer og økt energieffektivitet i 10 lavere inntektslande. Fortsett å være tilgjengelig for å modernisere energisektoren i disse lavere inntektslandene. Stakeholder-input Stakeholders var involvert på ulike stadier i utviklingen av dette forslaget. Det ble gjennomført omfattende konsultasjoner i 2014, inkludert følgende konsultasjoner og analysen av EUs klimapolitiske mål for 2030, gjennomførte Kommisjonen en konsekvensanalyse. Lovforslaget er forelagt Europaparlamentet, Rådet, Økonomisk og sosialt komité og Regionkommisjonen for videre behandling under den ordinære lovgivningsprosedyren. Publikum hadde mulighet til å gi tilbakemelding om lovforslaget etter at det ble vedtatt av EU-kommisjonen. Tilbakemelding ble mottatt fra 85 interessenter, og et sammendrag ble fremlagt for Europaparlamentet og Rådet. Nyttige dokumenter Tilbakemeldinger fra interessenter Delta i EU ETS Introduksjon til EUs utslippshandelssystem, herunder hvordan cap-and-trade-systemet fungerer, hvordan gratis kvoter tildeles, detaljer om overholdelse, inkludering av luftfart i system - og britisk opsjonsordning for små emittere og sykehus. EU ETS er det største multi-country, multi-sector drivhusgassutslipps trading system i verden. Den inneholder mer enn 11 000 kraftverk og industrianlegg i hele EU med rundt 1000 av disse i Storbritannia. Disse inkluderer kraftverk, oljeraffinaderier, offshore plattformer og næringer som produserer jern og stål, sement og kalk, papir, glass, keramikk og kjemikalier. Andre organisasjoner, inkludert universiteter og sykehus, kan også dekkes av EUs ETS, avhengig av forbrenningskapasiteten til utstyret på deres nettsteder. Luftfartsselskaper som flyr til eller fra en europeisk flyplass er også dekket av EUs ETS. Denne veiledningen forklarer EUs deknings - og handelssystem, inkludert detaljer om fasene for levering av systemet. Den gir informasjon om UKs søknad om frie kvoter i fase III via sine nasjonale implementeringsforanstaltninger (NIM), samt detaljer om samsvar og verifikasjon. Det er også seksjoner om utslippsregulering for luftfartsindustrien og UKs Small Emitters and Hospitals Opt-out Scheme. Hett og handel EUs ETS fungerer på en hylle - og handelsbasis, så det er et utslipp eller grense angitt på de totale klimagassutslippene som er tillatt av alle deltakere som er omfattet av systemet, og denne hatten omgjøres til omsettelige utslippskvoter. Tradisjonelle utslippskvoter tildeles til deltakere i markedet i EU ETS, dette gjøres via en blanding av gratis tildeling og auksjoner. Én godtgjørelse gir innehaveren rett til å avgive ett tonn CO2 (eller tilsvarende). Deltakere som er omfattet av EUs ETS må overvåke og rapportere sine utslipp hvert år og overgi nok utslippsbonuser for å dekke deres årlige utslipp. Deltakere som sannsynligvis vil slippe ut mer enn deres tildeling, har valg mellom å ta tiltak for å redusere sine utslipp eller kjøpe tilleggsavsetninger, enten fra sekundærmarkedet, f. eks. selskaper som har kvoter som de ikke trenger eller fra medlemsstat har auksjoner. Mer informasjon er tilgjengelig på EU ETS. karbonmarkeder nettside. Det spiller ingen rolle hvor (når det gjelder fysisk plassering) utslippsreduksjoner gjøres fordi utslippsbesparelser har samme miljøeffekt hvor de er laget. Bakgrunnen for utslippshandelen er at det muliggjør utslippsreduksjoner der kostnadene for reduksjonen er laveste, og reduserer den totale kostnaden for å takle klimaendringene. Hvordan handel fungerer: Et forenklet hypotetisk eksempel Historisk installasjon A og installasjon B utsender begge 210 tonn CO2 per år. Under EUs allokeringsprosess får de 200 kvoter hver. Ved utgangen av det første året ble det registrert utslipp på 180 Mt for installasjon A da det installerte en energieffektiv kjele i begynnelsen av året som reduserte CO2-utslippene. Det er nå gratis å selge overskuddstillatelsene på karbonmarkedet. Installasjon B emitterte imidlertid 220Mt CO2 fordi den trengte å øke produksjonskapasiteten, og det var for dyrt for det å investere i energieffektivitetsteknologi. Derfor kjøpte installasjon B kvoter fra markedet, som ble gjort tilgjengelig fordi installasjon A har vært i stand til å selge tilleggsavsetninger. Nettoeffekten er at investeringen i karbonreduksjon skjer på det billigste stedet, og CO2-utslippene er begrenset til 400 kvoter som er utstedt til begge anlegg. Leveringsfaser av utslippshandelssystemet Hittil har tre driftsfaser av EUs ETS blitt levert eller avtalt, selv om det er planlagt at ordningen vil fortsette etter 2020: Fase I (1. januar 2005 til 31. desember 2007) Denne fasen er fullført. Ytterligere detaljer om denne fasen kan ses på National Archives-versjonen av DECC: EU ETS Phase I websiden. Fase II (1. januar 2008 til 31. desember 2012) Fase II i EU ETS falt sammen med den første Kyoto-forpliktelsesperioden. Fase II bygger på leksjonene fra første fase, og ble utvidet til å dekke CO2-utslipp fra glass, mineralull, gips, flaring fra olje - og gassproduksjon offshore, petrokjemikalier, karbon svart og integrert stålverk. I fase II utviklet hver medlemsstat en nasjonal tildelingsplan (NAP) som angav den totale mengden kvoter som medlemsstaten hadde til hensikt å utstede i løpet av denne fasen, og hvordan den foreslo å distribuere disse kvotene til hver av sine operatører som omfattes av System. Hver NAP måtte godkjennes av EU-kommisjonen. Den godkjente UK Phase II NAP ble publisert 16. mars 2007. Ytterligere detaljer om denne fasen kan ses på National Archives versjon av National Archives versjon av DECC: EU ETS Phase 2 websiden. Fase III (1. januar 2013 til 31. desember 2020) Den nåværende fasen av EUs ETS bygger på de to foregående fasene, og er vesentlig revidert for å gi et større bidrag til å takle klimaendringer, blant annet: et EU-brett på antall tilgjengelige kvoter og en økning i auksjonering av disse kvotene, samt UKs ordningen for å redusere compliance kostnader for små emittere og sykehus. EU-dekselet vil redusere antall tilgjengelige kvoter med 1,74 hvert år, og levere en samlet reduksjon på 21 under 2005 verifiserte utslipp innen 2020. Banen beregnes fra et utgangspunkt i midtpunktet av fase II og vil beskrive en fallende cap fra 2013 og fremover. Gratis tildeling av kvoter Alle sektorer som er omfattet av EUs ETS. med unntak av det meste av EUs energisektorer, er utstyrt med en gratis tildeling av kvoter for å bistå med overgangen til en lav-karbonøkonomi. I tillegg er industrisektorer med betydelig risiko for konkurranse fra land uten tilsvarende karbonkostnader (se avsnitt om karbonlekkasje i EU ETS for mer informasjon) kvalifisert til å motta en høyere andel kvoter gratis. I 2011 ble det pålagt medlemslandene å fremlegge en liste over det foreløpige antall gratis kvoter som skal utstedes til hver industriell installasjon i fase III, referert til som nasjonale implementeringsforanstaltninger eller NIM. Storbritannia sendte sine NIM til EU-kommisjonen den 12. desember 2011 og sendte senere endrede NIM i april 2012. Den 5. september 2013 kunngjorde EU-kommisjonen fullføring av prosessen for å kontrollere og bekrefte den gratis tildelingen av EU-utslippsbonus i hver medlemsstat Nims. Det ble også annonsert at det var nødvendig med en krysssektoriell korrigeringsfaktor for å sikre at gratis tildeling over hele EU forblir innenfor dekslene i ETS-direktivet. Faktoren reduserte den foreløpige tildelingen for hver EU ETS-installasjon med 5,73 i 2013, og stiger til 17,56 i 2020. Den gjennomsnittlige reduksjonen av tildelingen er derfor 11,58 i perioden 2013-2020. Den første listen nedenfor viser gratis tildelingstall i fase III for hver industriell installasjon i Storbritannia, som godkjent av EU-kommisjonen 18. desember 2013. Den andre listen viser oppdaterte gratisallokeringsstall for fase III, med tanke på eventuelle endringer i tildelingen avtalt i Storbritannias NIM for individuelle installasjoner per 30. april 2014, for eksempel på grunn av delvise opphør, betydelige kapasitetsreduksjoner eller hvor installasjoner har kommet inn i EU ETS (nye aktører). Denne listen vil bli oppdatert på årsbasis for å ta hensyn til ytterligere endringer i tildeling i løpet av fasen. MS Excel-regneark. 73.2KB Denne filen kan ikke være egnet for brukere av hjelpeteknologi. Be om et tilgjengelig format. Hvis du bruker hjelpeteknologi (f. eks. En skjermleser) og trenger en versjon av dette dokumentet i et mer tilgjengelig format, vennligst send en e-post til correspondencedecc. gsi. gov. uk. Fortell oss hvilket format du trenger. Det vil hjelpe oss hvis du sier hvilken hjelpeteknologi du bruker. PDF. 635KB. 14 sider Denne filen kan ikke være egnet for brukere av hjelpeteknologi. Be om et tilgjengelig format. Hvis du bruker hjelpeteknologi (f. eks. En skjermleser) og trenger en versjon av dette dokumentet i et mer tilgjengelig format, vennligst send en e-post til correspondencedecc. gsi. gov. uk. Fortell oss hvilket format du trenger. Det vil hjelpe oss hvis du sier hvilken hjelpeteknologi du bruker. 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Karbonlekkasje og EU ETS Carbon leakage er et begrep som brukes til å beskrive utsiktene til en økning i globale klimagassutslipp når et selskap skifter produksjon eller investeringer utenfor EU fordi de ikke er i stand til å ha en juridisk bindende internasjonal klimaavtale å overføre kostnadsøkningene som EU-ETS gir sine kunder uten vesentlig tap av markedsandel. Den beste måten å håndtere karbonlekkasje ville være en juridisk bindende internasjonal klimaavtale. Dette ville skape like vilkår for industrien i og utenfor EU med hensyn til regnskapsføring av CO2-kostnadene. I mellomtiden gir EU ETS to mekanismer for å redusere risikoen for karbonlekkasje. For det første er sektorer som anses å ha betydelig risiko for karbonlekkasje, kvalifisert til å motta 100 gratis allokering av kvoter opp til sektorens referanseindeks. Dette er en viktig kilde til lettelse, da sektorer som ikke anses for å være i fare, vil motta 80 av deres tildeling gratis i 2013, og reduseres årlig til 30 i 2020 med sikte på å nå 0 (dvs. full auksjonering) i 2027. Den andre mekanismen tillater medlem Stater til å kompensere sektorer med betydelig risiko for karbonlekkasje som følge av indirekte EU ETS-kostnader (dvs. gjennom EU ETS-relaterte økninger i elektrisitetspriser), forutsatt at ordninger er utformet innenfor rammen fastsatt av EU-kommisjonen (se avsnitt om indirekte karbon lekkasje kompensasjon ordningen for mer informasjon). Den britiske regjeringen støtter kraftig prinsippet om gratis tildeling i fravær av en internasjonal klimaavtale. Vi mener at den forholdsmessige kostnadsfrie tildeling av kvoter gir lettelse til sektorer med betydelig risiko for karbonlekkasje uten å forhindre barrierer for internasjonal handel. Vi er imidlertid opptatt av at de som er mest utsatt for risiko, kanskje ikke blir kompensert tilstrekkelig i fremtiden hvis dagens EUs ETS-regler ikke er reformert for fase IV i EUs ETS. Den britiske regjeringen anerkjenner industriens bekymringer rundt konkurranseevne og karbonlekkasje, og er forpliktet til å sikre at sektorer som virkelig er i betydelig risiko for karbonlekkasje, er beskyttet mot denne risikoen. I juni 2014 publiserte vi et forskningsprosjekt bestilt av Institutt for energi og klimaendring og gjennomført av Vivid Economics og Ecofys. som undersøker forekomsten av karbonlekkasje så langt og de grunnleggende drivkraften for karbonlekkasje for et utvalg av industrisektorer og vurderer tiltakene for å redusere utslippene. Rapporten modellerer risikoen for karbonlekkasje i 24 industrisektorer, og ble produsert i samråd med industriinteressenter. Modelleringsanalyse viser at i mangel av noen formildende politiske tiltak (for eksempel fri tildeling av kvoter), ingen tillatelse for CO2-reduksjonspotensial, og ingen økning i CO2-regulering utenfor EU, er det en rekke sektorer som er utsatt for lekkasje. Gitt disse forutsetningene, viser modelleringsanalysen høyere kokeutslipp enn forventet å oppstå i realiteten. Synspunktene i rapporten er de av forfatterne, og representerer ikke en offisiell posisjon til den britiske regjeringen. Den endelige rapporten, casestudier og tilhørende peer review er tilgjengelige: Karbonlekkasjeutsikter i fase III i EUs ETS og utover Vurdering av karbonlekkasje status for gratis tildeling av kvoter Sektorer med risiko for karbonlekkasje vurderes mot et sett av kriterier og terskler angitt i EU ETS-direktivet. Listen over sektorer som er utsatt for lekkasje for perioden 2013-2014 ble vedtatt gjennom EUs komitologiprosedyre i desember 2009. med tillegg til listen i kommende beslutninger fra de europeiske kommisjonene. EUs ETS-direktiv muliggjør en gjennomgang av sektorer som er i fare hvert femte år, med mulighet for å legge til sektorer i listen på årlig, ad hoc-basis. Den 5. mai 2014 publiserte Europakommisjonen utkast til liste over sektorer for perioden 2015-19. basert på kvantitative og kvalitative kriterier fastsatt i ETS-direktivet. Utkastet til karbonlekkasje vil bli presentert for EUs klimakomité for avstemning snarest, hvoretter det må sendes til Europaparlamentet og Rådet i tre måneders kontroll før vedtaket. Den 31. august 2013 reagerte Storbritannia på Europakommisjonens konsultasjon om metoden for bestemmelse av karbonlekkelisten for 2015-19. UK-svar på Europakommisjonens konsultasjon om forutsetninger som skal brukes til EUs utslippskode for utslipp av utslipp til utslipp av utslipp fra utlandet (PDF, 163KB, 12 sider) Indirekte karbonlekkasjekompensasjonsordning I høsterklæringen 2011 annonserte kansleren at regjeringen hadde til hensikt å gjennomføre tiltak for å redusere virkningen av politikk på strømkostnadene for de mest kraftintensive næringene, som begynner i 2013 og er verdt rundt 250 millioner i perioden for utgiftsoversikt. Som en del av dette har regjeringen forpliktet seg til å kompensere de mest kraftintensive virksomheter for å kompensere for den indirekte prisen på Carbon Price Floor og EU ETS. underlagt retningslinjer for statsstøtte. I budsjettet 2014 annonserte kansleren at kompensasjon for de indirekte kostnadene for Carbon Price Floor og EU ETS ville bli utvidet til 2019-20. EU-kommisjonen vedtok reviderte retningslinjer for statsstøtte om kompensasjon for de indirekte kostnadene for EU ETS i juni 2012. Disse retningslinjene viser de sektorer som anses å være utsatt for en betydelig risiko for karbonlekkasje på grunn av indirekte utslippskostnader, og gir detaljer om maksimumsbeløpet nivåer av kompensasjon som kan gjøres tilgjengelig for dem. Enhver medlemsstats kompensasjonsordning må utformes innenfor rammen fastsatt av EU-kommisjonen. I oktober 2012 lanserte DECC og BIS den energikrevende industrien kompensasjonsordning konsultasjon. som beskriver våre forslag om kompensasjonspakkenes berettigelse og utforming. Konsultasjonen, som ble stengt i desember 2012, ga en mulighet for alle som er interessert i pakken til å kommentere forslagene, og hjelper oss med å sikre at kompensasjon er rettet mot de selskapene som er mest utsatt for karbonlekkasje som følge av energi og klima endre retningslinjer. Etter en detaljert vurdering av svarene og statsstøtteklareringen for EUs ETS-kompensasjonspakke, offentliggjorde vi i mai 2013 regjeringens svar på konsultasjonen og den endelige kompensasjonsordningen for EUs ETS. Storbritannia begynte å foreta betalinger for indirekte kostnader for EU ETS i 2013. For Carbon Price Floor kompensasjon, som fortsatt er gjenstand for statsstøtte godkjenning fra EU-kommisjonen, forventer vi å publisere veiledning senere i sommer og begynne å betale kort tid etterpå. New Entrants Reserve Den Nye Deltaker Reserve (NER) er et sett av EU-kvoter, reservert for nye operatører eller eksisterende operatører som har økt kapasiteten betydelig. UKs EU ETS Regulators er ansvarlig for å administrere og vurdere alle NER-søknader. Operatører som starter en ny aktøraktivitet, må sende inn en NER-søknad til sin regulator innen 12 måneder etter at den nye eller utvidede aktiviteten starter normal drift. Mer informasjon om søknad til fase III NER er tilgjengelig på Miljøstyrelsen: EU ETS New Entrant Reserve (NER) nettside. Ytterligere informasjon om kvoter kan bli funnet på EU ETS. tillatelser side. Overholdelse av EUs ETS Forordningene for utslipp av drivhusgasser for drivhusgasser 2012 krever at alle operatører som utfører en aktivitet som dekkes av EUs ETS, har utslippstillatelse for drivhusgasser - i kraft en lisens til å drive og avgi klimagasser som omfattes av EUs ETS . Aktiviteter som omfattes av EU ETS er en av aktivitetene som er oppført i vedlegg I til EUs ETS-direktiv. EUs ETS-regulatorer er ansvarlige for å håndheve samsvar med EUs ETS-forskrifter, herunder operasjonelle funksjoner som tildeling og vedlikehold av tillatelser og utslippsplaner (for luftfart), overvåking og rapportering (inkludert overvåkingsplaner), vurdering av verifiserte utslippsrapporter (og tonnekilometer rapporter), vurderer søknader til NER. fastsettelse av reduksjoner i tildelinger som følge av endringer i kapasitet eller opphør av aktiviteter, utveksling av informasjon med UKAS på verifikasjonsaktiviteter. Ved beregning av sivile straffer bestemmer DECC verdien av EU ETS-kullprisen som brukes av regulatoren. Bestemmelsen offentliggjøres i november hvert år: 7. august 2013 lanserte vi en konsultasjon om en rekke tekniske endringer i reguleringen av klimagassutslippsordningen for 2012 for å forenkle og harmonisere EU ETS-straffer i overgangen til fase III, forbedre klarhet og redusere byrden for bedrifter. Konsultasjonen ble stengt 19. september 2013. For mer informasjon om hvordan man overholder EU ETS, vennligst besøk: Overvåking, rapportering, verifisering og akkreditering En EU ETS-operatør må foreslå en overvåkingsplan når man søker om drivhusgassutslippstillatelse (eller utslippsplan for luftfart operatører). Overvåkningsplanen gir informasjon om hvordan utslippene av utslipp fra EU ETS-operatører skal måles og rapporteres. En overvåkingsplan må utvikles i samsvar med EUs overvåknings - og rapporteringsforordning og godkjennes av en EU ETS-regulator. Rapporteringsåret går fra 1. januar til 31. desember hvert år. EU ETS krever at alle årlige utslippsrapporter og overvåking skal verifiseres av en uavhengig verifikator i samsvar med Akkrediterings - og verifikasjonsforskriften. En verifikator vil sjekke for inkonsekvenser i overvåking med den godkjente planen og om dataene i utslippsrapporten er fullstendige og pålitelige. Den europeiske kommisjonens veiledning om akkreditering og verifikasjonsforordning har til formål å hjelpe operatører av alle stasjonære installasjoner, luftfartsselskaper, verifikasjonsorganer og regulatorer å utføre verifikasjoner konsekvent i hele EU. Den gir praktisk informasjon og råd om prosessen og kravene til årlig verifisering som kreves av EU ETS-direktivet, EUs overvåknings - og rapporteringsforordning og klimagassplaner Finne en akkreditert EU ETS-verifikator i Storbritannia Forskrift om akkreditering og verifikasjon (Commission Regulation 6002012EU) krever at EU ETS-verifikatorer oppfyller spesifikke krav. I Storbritannia er disse kravene demonstrert ved å være akkreditert. UK Accreditation Service (UKAS) er ansvarlig for akkreditering og tilsyn med verifikatorer i Storbritannia og for å opprettholde en liste over disse verifikatorene. Listen over UKAS-akkrediterte verifikatorer for fase III, inkludert luftfart, av EUs utslippshandelssystem, angir omfanget av en bestemt verifiseringsakkreditering, for eksempel i forhold til bestemte sektorer. UKAS-listen inkluderer ikke verifikatorer akkreditert av andre nasjonale akkrediteringsorganer, og i fase III-regler er det ingen registrerings - eller aksepteringsprosedyre for ikke-britiske verifikatorer. Alle verifikatorer er pålagt å demonstrere at de er enten akkreditert (eller sertifisert) i samsvar med Akkreditering og Verifikasjonsforskriften. Operatørene er ansvarlige for at deres verifikator er akkreditert for relevant arbeidsomfang. Detaljer om verifikatorens omfang av akkreditering finner du på verifikatorens akkrediteringsbevis. Hvis du er en EU ETS verifikasjonsorganisasjon som arbeider i Storbritannia for første gang, trenger du en ETSWAP-konto for å se kundens rapporter og sende inn bekreftelseserklæringen, samt en registerkonto. For å åpne en verifikator ETSWAP-konto, send en e-post til EThelpenvironment-agency. gov. uk. Det anbefales at du gjør dette når du har en klient i Storbritannia. Ta med følgende informasjon i e-postadressen din: Navn på verifiseringsorganisasjon Landets akkrediteringsnummer En kopi av akkrediteringsbeviset Fullt navn og e-postadresse til hovedkontakten (denne brukeren har ansvaret for å administrere andre brukere for denne verifikatoren) ETSWAP-administratoren har godkjent forespørselen om tilgang, ETSWAP vil sende deg en e-post med innloggingsdetaljer for din individuelle brukerkonto. For å søke om en verifikatorregistreringskonto, send en e-post til etregistryhelpenvironment-agency. gov. uk for en applikasjonspakke. Ytterligere veiledning Bruke britiske data om utslipp av drivhusgasser i EUs ETS-overvåkning og rapportering: Landspesifikke faktorlisten Europa-kommisjonens forordning om overvåking og rapportering gjør at nasjonalt rapporterte data kan brukes som standardfaktorer under spesielle forhold. Karbonutslippsfaktorer og kalorier fra britisk drivhusgassinventar (AEA-Ricardo, 2015) er tilgjengelige for årlig utslippsrapportering for EU ETS: MS Excel-regneark. 76.6KB Denne filen kan ikke være egnet for brukere av hjelpeteknologi. Be om et tilgjengelig format. Hvis du bruker hjelpeteknologi (f. eks. En skjermleser) og trenger en versjon av dette dokumentet i et mer tilgjengelig format, vennligst send en e-post til correspondencedecc. gsi. gov. uk. Fortell oss hvilket format du trenger. Det vil hjelpe oss hvis du sier hvilken hjelpeteknologi du bruker. De nasjonale faktorene er utslippsfaktorer i Tier 2 og Tier 2a og nettovannverdier for spesifikke brensler som brukes av bestemte næringer. Dataene er i stor utstrekning hentet fra britisk drivhusgassinventar som presenteres årlig til FNs rammekonvensjon om klimaendringer (UNFCCC). Drivhusgassbeholdningen er utviklet uavhengig av EUs utslippshandelssystem. Disse dataene betyr dataene nevnt i artikkel 31 nr. 1 i overvåkings - og rapporteringsforordningen. Faktorene i disse tabellene skal kun brukes i samsvar med kravene i en installert godkjent overvåkingsplan, som er en del av klimagasstillatelsen. Tabeller for tidligere år er tilgjengelige som følger: EU ETS-manglende overholdelse EUs ETS-direktiv krever at medlemslandene innfører et straffesystem som er effektivt, forholdsmessig og avskrekkende, men karakteren av straffer er i stor grad overlatt til medlemsstaters skjønn ( med unntak av straffen for manglende overlevering av tilstrekkelige godtgjørelser under visse omstendigheter). Gassutslippsordningen for drivhusgass 2012 fastsetter sivile straffer som en person er ansvarlig for dersom de ikke overholder EUs ETS. DECC har utarbeidet veiledningen under for offshore olje - og gassindustrien som beskriver avdelingens tilnærming til håndhevelse og sanksjoner. Forskriftene gir rett til å klage på beslutninger fra en EU ETS Regulator. I England og Wales blir appeller til både operatører av stasjonære installasjoner og flyoperatører, samt offshoreinstallasjoner, hørt av førstegangsdomstolen. Appel i Nord-Irland blir hørt og bestemt av Planning Appeals Commission (PAC). I Skottland hører direktoratet for planlegging og miljøklager (DPEA) i den skotske regjeringen og avgjør appeller på vegne av de skotske ministrene. Ulike arrangementer gjelder for klager fra luftfartsoperatører mot en straffeavtale som blir betjent i henhold til forskriftene for utslipp av drivhusgassutslipp for 2010 for ordningsåret 2012. De relevante reglene i 2010-forskriftene gjelder fortsatt i forbindelse med enhver klage som er tatt i mot enhver beslutning eller melding som ble gitt i henhold til 2010-forskriften. Disse fastsetter at klageinstansen er statssekretæren eller en uavhengig person utpekt av statssekretæren. Appelbestemmelser 2012 Ordningsår: Seks ankebestemmelser er utarbeidet i henhold til disse forskriftene: Luftfart i EU ETS EUs utslippshandelssystem krever at flyoperatører skal overvåke og rapportere utslipp av CO2 og overgi tilsvarende antall kvoter. Ordningen er utformet for å være en kostnadseffektiv måte å takle CO2-utslipp fra luftfart, slik at luftfartsindustrien kan vokse bærekraftig samtidig som utslippsreduksjonene blir levert. Ordningen gjelder for alle flyreiser mellom flyplasser i Det europeiske økonomiske samarbeidsområde. Nærmere informasjon om underliggende EU-lovgivning og relaterte detaljerte FAQs finner du på EU-kommisjonen: Redusere utslipp fra luftfartssiden. Vi konsulterer om implementering av den reviderte Aviation ETS i Storbritannia. Konsulten søker kommentarer om de foreslåtte endringene til britiske forskrifter og konsultasjonsprosessen. Du kan se konsultasjonen og tilhørende dokumenter på EUs nettsider for luftfartssammenslutninger. Nøkkeltallene er: Et internasjonalt økonomisk område (EØS) omfang for luftfartsutvinningsplanen fra 1. januar 2013 til 31. desember 2016 Utsettelse av overholdelsesfrister for 2013-utslipp til mars og april 2015 Et unntak for ikke-kommersielle operatører som sender mindre enn 1000 tonn CO2 per år fram til 2020 Forenklede prosedyrer for operatører som utsender mindre enn 25 000 tonn CO2 per år Antall gratis kvoter og utstedte kvoter blir redusert i forhold til reduksjonen i omfanget. Vi gleder oss over visninger fra enhver organisasjon eller enkeltperson, og konsultasjonen vil ha særlig interesse for flyoperatører, flyoperatører, verifikatorer, andre deltakere i EUs ETS og miljøgrupper. Regulering av utslipp av luftfartøyoperatører Hver luftfartøyoperatør administreres av en enkelt medlemsstat. EU-kommisjonen utarbeider en årlig liste som viser hvilke operatører som administreres av hvilken medlemsstat. Det er tre regulatorer i Storbritannia som regulerer Aviation ETS-aktiviteter, avhengig av plasseringen av et operatørkontor eller hvor deres største andel av utslippene forekommer: Miljøstyrelsen (for operatører i England) Det skotske miljøvernbyrået og naturressursene Wales. Du kan finne ut mer om hva operatører må gjøre for å overholde ordningen på EUs ETS. operatører og aktiviteter påvirket nettside. Auksjonering Gratis tildeling til flyoperatører Europa-kommisjonen vedtok lovgivning i april 2014 om å endre omfanget av EUETS med hensyn til internasjonale luftfartsutslipp (Forordning (EU) nr. 4212014 om endring av direktiv 200387EC). Som et resultat av endringen i omfanget av Aviation EU ETS. Storbritannia er forpliktet til å beregne tildelingen av gratis kvoter på grunn av berettigede flyoperatører. Denne omberegningen er gjort i samsvar med Kommisjonens veiledning. Tabellen inkluderer alle operatører som tidligere var på grunn av gratis kvoter og indikerer deres nye gratis tildeling av tilskudd under redusert omfang. Operatører som har sluttet å operere, er fjernet fra denne listen. Operators who are now exempt under the new non-commercial de minimis (under 1,000tCO2 per annum calculated on the basis of full scope) still appear in this table. However owing to their exempt status these operators are not due free allowances and as such their Aircraft Operator Holding Account (AOHA) will be marked as excluded in the registry meaning that no transactions can be carried out and no free allowances will be deposited. If you believe you are no longer due any allowances as a result of the changes or you wish to seek further clarification as to your new free allowance allocation please contact the Environment Agency aviation helpdesk ETAviationHelpenvironment-agency. gov. uk . Historic information Please visit the DECC EU ETS legislation page to see UK legislation and EU Regulations . Please visit the National Archives version of the Aviation in the EU Emissions Trading System web pages to see information relating to aviationaviation appeals previously available on the DECC website. Small Emitter and Hospital Opt-out Scheme The UKs Small Emitter and Hospital Opt-out Scheme allows eligible installations to be excluded from Phase 3 (2013 to 2020) of the EU ETS. The scheme has been approved by the European Commission. Article 27 of the EU ETS Directive enables small emitters and hospitals to be excluded from the EU ETS. with the primary aim of reducing the administrative burdens on these installations. This acknowledges that the administrative costs faced by smaller emitters under the EU ETS are disproportionately high per tonne of CO2, in comparison to the costs for large emitting installations. The Directive requires that excluded installations are subject to a domestic scheme that will deliver an equivalent contribution to emission reductions as the EU ETS . The UKs opt-out scheme was designed in consultation with industry and aims to offer a simple, deregulatory alternative to the EU ETS whilst maintaining the incentives for emission reductions. We estimate that the scheme will offer savings of up to 39 million to industry over Phase III. The opt-out scheme offers deregulatory savings through: the replacement of a requirement to surrender allowances with an emissions reduction target simplified monitoring, reporting and verification requirements (MRV), including the removal of the requirement for third party verification no requirement to hold an active registry account less burdensome rules for target adjustment following an increase in installation capacity Further details on the scheme are contained in the documents listed below. Please note that these documents will be updated later in 2015. The consultations referred to in the Frequently asked questions document are now closed. The UKs Small Emitter and Hospital Opt-out Scheme (document updated on 25 March 2013 following agreement of the EU Registries Regulation 2012) Participants in the opt-out scheme Operators of installations that are excluded from the EU ETS and participating in the Opt-out Scheme should refer to the document European Union Emissions Trading System (EU ETS ) Phase III: Guidance for installations How to comply with the EU ETS and Small Emitter and Hospital Opt-out Scheme . The application period for the opt-out scheme ran from 23 May to 18 July 2012. Operators of 247 installations were approved to participate in the opt-out scheme by the European Commission as excluded from the EU ETS . The EU ETS Directive does not provide for further installations to join the opt-out scheme. Previous information on the development of the scheme including, the application period, policy development and the small emitters workshop held on the 12 June 2012, can be viewed on the National Archives website. The EU Emissions Trading System (EU ETS) The EU emissions trading system (EU ETS) is a cornerstone of the EUs policy to combat climate change and its key tool for reducing greenhouse gas emissions cost-effectively. It is the worlds first major carbon market and remains the biggest one. operates in 31 countries (all 28 EU countries plus Iceland, Liechtenstein and Norway) limits emissions from more than 11,000 heavy energy-using installations (power stations amp industrial plants) and airlines operating between these countries covers around 45 of the EUs greenhouse gas emissions. A cap and trade system The EU ETS works on the cap and trade principle. A cap is set on the total amount of certain greenhouse gases that can be emitted by installations covered by the system. The cap is reduced over time so that total emissions fall . Within the cap, companies receive or buy emission allowances which they can trade with one another as needed. They can also buy limited amounts of international credits from emission-saving projects around the world. The limit on the total number of allowances available ensures that they have a value. After each year a company must surrender enough allowances to cover all its emissions, otherwise heavy fines are imposed. If a company reduces its emissions, it can keep the spare allowances to cover its future needs or else sell them to another company that is short of allowances. Trading brings flexibility that ensures emissions are cut where it costs least to do so . A robust carbon price also promotes investment in clean, low-carbon technologies . Key features of phase 3 (2013-2020) The EU ETS is now in its third phase significantly different from phases 1 and 2 . The main changes are: A single, EU-wide cap on emissions applies in place of the previous system of national caps Auctioning is the default method for allocating allowances (instead of free allocation ), and harmonised allocation rules apply to the allowances still given away for free More sectors and gases included 300 million allowances set aside in the New Entrants Reserve to fund the deployment of innovative renewable energy technologies and carbon capture and storage through the NER 300 programme Sectors and gases covered The system covers the following sectors and gases with the focus on emissions that can be measured, reported and verified with a high level of accuracy: carbon dioxide (CO 2 ) from power and heat generation energy-intensive industry sectors including oil refineries, steel works and production of iron, aluminium, metals, cement, lime, glass, ceramics, pulp, paper, cardboard, acids and bulk organic chemicals commercial aviation nitrous oxide (N 2 O) from production of nitric, adipic and glyoxylic acids and glyoxal perfluorocarbons (PFCs) from aluminium production Participation in the EU ETS is mandatory for companies in these sectors . but in some sectors only plants above a certain size are included certain small installations can be excluded if governments put in place fiscal or other measures that will cut their emissions by an equivalent amount in the aviation sector, until 2016 the EU ETS applies only to flights between airports located in the European Economic Area (EEA). Delivering emissions reductions The EU ETS has proved that putting a price on carbon and trading in it can work. Emissions from installations in the scheme are falling as intended by around 5 compared to the beginning of phase 3 (2013) (see 2015 figures ). In 2020 . emissions from sectors covered by the system will be 21 lower than in 2005 . Developing the carbon market Set up in 2005, the EU ETS is the worlds first and biggest international emissions trading system, accounting for over three-quarters of international carbon trading . The EU ETS is also inspiring the development of emissions trading in other countries and regions. The EU aims to link the EU ETS with other compatible systems. Main EU ETS legislation Carbon market reports Revision of the EU ETS for phase 3 Implementation Legislative History of Directive 200387EC Work prior to the Commission proposal Commission proposal of October 2001 Commissions reaction to reading of the proposal in Council and Parliament (including Councils common position) Open all questions Questions and Answers on the revised EU Emissions Trading System (December 2008) What is the aim of emissions trading The aim of the EU Emissions Trading System (EU ETS) is to help EU Member States achieve their commitments to limit or reduce greenhouse gas emissions in a cost-effective way. Allowing participating companies to buy or sell emission allowances means that emission cuts can be achieved at least cost. The EU ETS is the cornerstone of the EUs strategy for fighting climate change. It is the first international trading system for CO 2 emissions in the world and has been in operation since 2005. As of I January 2008 it applies not only to the 27 EU Member States, but also to the other three members of the European Economic Area Norway, Iceland and Liechtenstein. It currently covers over 10,000 installations in the energy and industrial sectors which are collectively responsible for close to half of the EUs emissions of CO 2 and 40 of its total greenhouse gas emissions. An amendment to the EU ETS Directive agreed in July 2008 will bring the aviation sector into the system from 2012. How does emissions trading work The EU ETS is a cap and trade system, that is to say it caps the overall level of emissions allowed but, within that limit, allows participants in the system to buy and sell allowances as they require. These allowances are the common trading currency at the heart of the system. One allowance gives the holder the right to emit one tonne of CO 2 or the equivalent amount of another greenhouse gas. The cap on the total number of allowances creates scarcity in the market. In the first and second trading period under the scheme, Member States had to draw up national allocation plans (NAPs) which determine their total level of ETS emissions and how many emission allowances each installation in their country receives. At the end of each year installations must surrender allowances equivalent to their emissions. Companies that keep their emissions below the level of their allowances can sell their excess allowances. Those facing difficulty in keeping their emissions in line with their allowances have a choice between taking measures to reduce their own emissions such as investing in more efficient technology or using less carbon-intensive energy sources or buying the extra allowances they need on the market, or a combination of the two. Such choices are likely to be determined by relative costs. In this way, emissions are reduced wherever it is most cost-effective to do so. How long has the EU ETS been operating The EU ETS was launched on 1 January 2005. The first trading period ran for three years to the end of 2007 and was a learning by doing phase to prepare for the crucial second trading period. The second trading period began on 1 January 2008 and runs for five years until the end of 2012. The importance of the second trading period stems from the fact that it coincides with the first commitment period of the Kyoto Protocol, during which the EU and other industrialised countries must meet their targets to limit or reduce greenhouse gas emissions. For the second trading period EU ETS emissions have been capped at around 6.5 below 2005 levels to help ensure that the EU as a whole, and Member States individually, deliver on their Kyoto commitments. What are the main lessons learned from experience so far The EU ETS has put a price on carbon and proved that trading in greenhouse gas emissions works. The first trading period successfully established the free trading of emission allowances across the EU, put in place the necessary infrastructure and developed a dynamic carbon market. The environmental benefit of the first phase may be limited due to excessive allocation of allowances in some Member States and some sectors, due mainly to a reliance on emission projections before verified emissions data became available under the EU ETS. When the publication of verified emissions data for 2005 highlighted this over-allocation, the market reacted as would be expected by lowering the market price of allowances. The availability of verified emissions data has allowed the Commission to ensure that the cap on national allocations under the second phase is set at a level that results in real emission reductions. Besides underlining the need for verified data, experience so far has shown that greater harmonisation within the EU ETS is imperative to ensure that the EU achieves its emissions reductions objectives at least cost and with minimal competitive distortions. The need for more harmonisation is clearest with respect to how the cap on overall emission allowances is set. The first two trading periods also show that widely differing national methods for allocating allowances to installations threaten fair competition in the internal market. Furthermore, greater harmonisation, clarification and refinement are needed with respect to the scope of the system, the access to credits from emission-reduction projects outside the EU, the conditions for linking the EU ETS to emissions trading systems elsewhere and the monitoring, verification and reporting requirements. What are the main changes to the EU ETS and as of when will they apply The agreed design changes will apply as of the third trading period, i. e. January 2013. While preparatory work will be initiated immediately, the applicable rules will not change until January 2013 to ensure that regulatory stability is maintained. The EU ETS in the third period will be a more efficient, more harmonised and fairer system. Increased efficiency is achieved by means of a longer trading period (8 years instead of 5 years), a robust and annually declining emissions cap (21 reduction in 2020 compared to 2005) and a substantial increase in the amount of auctioning (from less than 4 in phase 2 to more than half in phase 3). More harmonisation has been agreed in many areas, including with respect to the cap-setting (an EU-wide cap instead of the national caps in phases 1 and 2) and the rules for transitional free allocation. The fairness of the system has been substantially increased by the move towards EU-wide free allocation rules for industrial installations and by the introduction of a redistribution mechanism that entitles new Member States to auction more allowances. How does the final text compare to the initial Commission proposal The climate and energy targets agreed by the 2007 Spring European Council have been maintained and the overall architecture of the Commissions proposal on the EU ETS remains intact. That is to say that there will be one EU-wide cap on the number of emission allowances and this cap will decrease annually along a linear trend line, which will continue beyond the end of the third trading period (2013-2020). The main difference as compared to the proposal is that auctioning of allowances will be phased in more slowly. What are the main changes compared to the Commissions proposal In summary, the main changes that have been made to the proposal are as follows: Certain Member States are allowed an optional and temporary derogation from the rule that no allowances are to be allocated free of charge to electricity generators as of 2013. This option to derogate is available to Member States which fulfil certain conditions related to the interconnectivity of their electricity grid, share of a single fossil fuel in electricity production, and GDPcapita in relation to the EU-27 average. In addition, the amount of free allowances that a Member State can allocate to power plants is limited to 70 of carbon dioxide emissions of relevant plants in phase 1 and declines in the years thereafter. Furthermore free allocation in phase 3 can only be given to power plants that are operational or under construction no later than end 2008. See reply to question 15 below. There will be more details in the Directive on the criteria to be used to determine the sectors or sub-sectors deemed to be exposed to a significant risk of carbon leakage . and an earlier date of publication of the Commissions list of such sectors (31 December 2009). Moreover, subject to review when a satisfactory international agreement is reached, installations in all exposed industries will receive 100 free allowances to the extent that they use the most efficient technology. The free allocation to industry is limited to the share of these industries emissions in total emissions in 2005 to 2007. The total number of allowances allocated for free to installations in industry sectors will decline annually in line with the decline of the emissions cap. Member States may also compensate certain installations for CO 2 costs passed on in electricity prices if the CO 2 costs might otherwise expose them to the risk of carbon leakage. The Commission has undertaken to modify the Community guidelines on state aid for environmental protection in this respect. See reply to question 15 below. The level of auctioning of allowances for non-exposed industry will increase in a linear manner as proposed by the Commission, but rather than reaching 100 by 2020 it will reach 70, with a view to reaching 100 by 2027. As foreseen in the Commissions proposal, 10 of the allowances for auctioning will be redistributed from Member States with high per capita income to those with low per capita income in order to strengthen the financial capacity of the latter to invest in climate friendly technologies. A provision has been added for another redistributive mechanism of 2 of auctioned allowances to take into account Member States which in 2005 had achieved a reduction of at least 20 in greenhouse gas emissions compared with the reference year set by the Kyoto Protocol. The share of auctioning revenues that Member States are recommended to use to fight and adapt to climate change mainly within the EU, but also in developing countries, is raised from 20 to 50. The text provides for a top-up to the proposed permitted level of use of JICDM credits in the 20 scenario for existing operators that received the lowest budgets to import and use such credits in relation to allocations and access to credits in the period 2008-2012. New sectors, new entrants in the periods 2013-2020 and 2008-2012 will also be able to use credits. The total amount of credits that may be used will, however, not exceed 50 of the reduction between 2008 and 2020. Based on a stricter emissions reduction in the context of a satisfactory international agreement, the Commission could allow additional access to CERs and ERUs for operators in the Community scheme. See reply to question 20 below. The proceeds from auctioning 300 million allowances from the new entrants reserve will be used to support up to 12 carbon capture and storage demonstration projects and projects demonstrating innovative renewable energy technologies. A number of conditions are attached to this financing mechanism. See reply to question 30 below. The possibility to opt-out small combustion installations provided they are subject to equivalent measures has been extended to cover all small installations irrespective of activity, the emission threshold has been raised from 10,000 to 25,000 tonnes of CO 2 per year, and the capacity threshold that combustion installations have to fulfil in addition has been raised from 25MW to 35MW. With these increased thresholds, the share of covered emissions that would potentially be excluded from the emissions trading system becomes significant, and consequently a provision has been added to allow for a corresponding reduction of the EU-wide cap on allowances. Will there still be national allocation plans (NAPs) No. In their NAPs for the first (2005-2007) and the second (2008-2012) trading periods, Member States determined the total quantity of allowances to be issued the cap and how these would be allocated to the installations concerned. This approach has generated significant differences in allocation rules, creating an incentive for each Member State to favour its own industry, and has led to great complexity. As from the third trading period, there will be a single EU-wide cap and allowances will be allocated on the basis of harmonised rules. National allocation plans will therefore not be needed any more. How will the emission cap in phase 3 be determined The rules for calculating the EU-wide cap are as follows: From 2013, the total number of allowances will decrease annually in a linear manner. The starting point of this line is the average total quantity of allowances (phase 2 cap) to be issued by Member States for the 2008-12 period, adjusted to reflect the broadened scope of the system from 2013 as well as any small installations that Member States have chosen to exclude. The linear factor by which the annual amount shall decrease is 1.74 in relation to the phase 2 cap. The starting point for determining the linear factor of 1.74 is the 20 overall reduction of greenhouse gases compared to 1990, which is equivalent to a 14 reduction compared to 2005. However, a larger reduction is required of the EU ETS because it is cheaper to reduce emissions in the ETS sectors. The division that minimises overall reduction cost amounts to: a 21 reduction in EU ETS sector emissions compared to 2005 by 2020 a reduction of around 10 compared to 2005 for the sectors that are not covered by the EU ETS. The 21 reduction in 2020 results in an ETS cap in 2020 of a maximum of 1720 million allowances and implies an average phase 3 cap (2013 to 2020) of some 1846 million allowances and a reduction of 11 compared to the phase 2 cap. All absolute figures indicated correspond to the coverage at the start of the second trading period and therefore dont take account of aviation, which will be added in 2012, and other sectors that will be added in phase 3. The final figures for the annual emission caps in phase 3 will be determined and published by the Commission by 30 September 2010. How will the emission cap beyond phase 3 be determined The linear factor of 1.74 used to determine the phase 3 cap will continue to apply beyond the end of the trading period in 2020 and will determine the cap for the fourth trading period (2021 to 2028) and beyond. It may be revised by 2025 at the latest. In fact, significant emission reductions of 60-80 compared to 1990 will be necessary by 2050 to reach the strategic objective of limiting the global average temperature increase to not more than 2C above pre-industrial levels. An EU-wide cap on emission allowances will be determined for each individual year. Will this reduce flexibility for the installations concerned No, flexibility for installations will not be reduced at all. In any year, the allowances to be auctioned and distributed have to be issued by the competent authorities by 28 February. The last date for operators to surrender allowances is 30 April of the year following the year in which the emissions took place. So operators receive allowances for the current year before they have to surrender allowances to cover their emissions for the previous year. Allowances remain valid throughout the trading period and any surplus allowances can now be banked for use in subsequent trading periods. In this respect nothing will change. The system will remain based on trading periods, but the third trading period will last eight years, from 2013 to 2020, as opposed to five years for the second phase from 2008 to 2012. For the second trading period Member States generally decided to allocate equal total quantities of allowances for each year. The linear decrease each year from 2013 will correspond better to expected emissions trends over the period. What are the tentative annual ETS cap figures for the period 2013 to 2020 The tentative annual cap figures are as follows: These figures are based on the scope of the ETS as applicable in phase 2 (2008 to 2012), and the Commissions decisions on the national allocation plans for phase 2, amounting to 2083 million tonnes. These figures will be adjusted for several reasons. Firstly, adjustment will be made to take into account the extensions of the scope in phase 2, provided that Member States substantiate and verify their emissions accruing from these extensions. Secondly, adjustment will be made with respect to further extensions of the scope of the ETS in the third trading period. Thirdly, any opt-out of small installations will lead to a corresponding reduction of the cap. Fourthly, the figures do not take account of the inclusion of aviation, nor of emissions from Norway, Iceland and Liechtenstein. Will allowances still be allocated for free Yes. Industrial installations will receive transitional free allocation. And in those Member States that are eligible for the optional derogation, power plants may, if the Member State so decides, also receive free allowances. It is estimated that at least half of the available allowances as of 2013 will be auctioned. While the great majority of allowances has been allocated free of charge to installations in the first and second trading periods, the Commission proposed that auctioning of allowances should become the basic principle for allocation. This is because auctioning best ensures the efficiency, transparency and simplicity of the system and creates the greatest incentive for investments in a low-carbon economy. It best complies with the polluter pays principle and avoids giving windfall profits to certain sectors that have passed on the notional cost of allowances to their customers despite receiving them for free. How will allowances be handed out for free By 31 December 2010, the Commission will adopt EU-wide rules, which will be developed under a committee procedure (Comitology). These rules will fully harmonise allocations and thus all firms across the EU with the same or similar activities will be subject to the same rules. The rules will ensure as far as possible that the allocation promotes carbon-efficient technologies. The adopted rules provide that to the extent feasible, allocations are to be based on so-called benchmarks, e. g. a number of allowances per quantity of historical output. Such rules reward operators that have taken early action to reduce greenhouse gases, better reflect the polluter pays principle and give stronger incentives to reduce emissions, as allocations would no longer depend on historical emissions. All allocations are to be determined before the start of the third trading period and no ex-post adjustments will be allowed. Which installations will receive free allocations and which will not How will negative impacts on competitiveness be avoided Taking into account their ability to pass on the increased cost of emission allowances, full auctioning is the rule from 2013 onwards for electricity generators. However, Member States who fulfil certain conditions relating to their interconnectivity or their share of fossil fuels in electricity production and GDP per capita in relation to the EU-27 average, have the option to temporarily deviate from this rule with respect to existing power plants. The auctioning rate in 2013 is to be at least 30 in relation to emissions in the first period and has to increase progressively to 100 no later than 2020. If the option is applied, the Member State has to undertake to invest in improving and upgrading of the infrastructure, in clean technologies and in diversification of their energy mix and sources of supply for an amount to the extent possible equal to the market value of the free allocation. In other sectors, allocations for free will be phased out progressively from 2013, with Member States agreeing to start at 20 auctioning in 2013, increasing to 70 auctioning in 2020 with a view to reaching 100 in 2027. However, an exception will be made for installations in sectors that are found to be exposed to a significant risk of carbon leakage. This risk could occur if the EU ETS increased production costs so much that companies decided to relocate production to areas outside the EU that are not subject to comparable emission constraints. The Commission will determine the sectors concerned by 31 December 2009. To do this, the Commission will assess inter alia whether the direct and indirect additional production costs induced by the implementation of the ETS Directive as a proportion of gross value added exceed 5 and whether the total value of its exports and imports divided by the total value of its turnover and imports exceeds 10. If the result for either of these criteria exceeds 30, the sector would also be considered to be exposed to a significant risk of carbon leakage. Installations in these sectors would receive 100 of their share in the annually declining total quantity of allowances for free. The share of these industries emissions is determined in relation to total ETS emissions in 2005 to 2007. CO 2 costs passed on in electricity prices could also expose certain installations to the risk of carbon leakage. In order to avoid such risk, Member States may grant a compensation with respect to such costs. In the absence of an international agreement on climate change, the Commission has undertaken to modify the Community guidelines on state aid for environmental protection in this respect. Under an international agreement which ensures that competitors in other parts of the world bear a comparable cost, the risk of carbon leakage may well be negligible. Therefore, by 30 June 2010, the Commission will carry out an in-depth assessment of the situation of energy-intensive industry and the risk of carbon leakage, in the light of the outcome of the international negotiations and also taking into account any binding sectoral agreements that may have been concluded. The report will be accompanied by any proposals considered appropriate. These could potentially include maintaining or adjusting the proportion of allowances received free of charge to industrial installations that are particularly exposed to global competition or including importers of the products concerned in the ETS. Who will organise the auctions and how will they be carried out Member States will be responsible for ensuring that the allowances given to them are auctioned. Each Member State has to decide whether it wants to develop its own auctioning infrastructure and platform or whether it wants to cooperate with other Member States to develop regional or EU-wide solutions. The distribution of the auctioning rights to Member States is largely based on emissions in phase 1 of the EU ETS, but a part of the rights will be redistributed from richer Member States to poorer ones to take account of the lower GDP per head and higher prospects for growth and emissions among the latter. It is still the case that 10 of the rights to auction allowances will be redistributed from Member States with high per capita income to those with low per capita income in order to strengthen the financial capacity of the latter to invest in climate friendly technologies. However, a provision has been added for another redistributive mechanism of 2 to take into account Member States which in 2005 had achieved a reduction of at least 20 in greenhouse gas emissions compared with the reference year set by the Kyoto Protocol. Nine Member States benefit from this provision. Any auctioning must respect the rules of the internal market and must therefore be open to any potential buyer under non-discriminatory conditions. By 30 June 2010, the Commission will adopt a Regulation (through the comitology procedure) that will provide the appropriate rules and conditions for ensuring efficient, coordinated auctions without disturbing the allowance market. How many allowances will each Member State auction and how is this amount determined All allowances which are not allocated free of charge will be auctioned. A total of 88 of allowances to be auctioned by each Member State is distributed on the basis of the Member States share of historic emissions under the EU ETS. For purposes of solidarity and growth, 12 of the total quantity is distributed in a way that takes into account GDP per capita and the achievements under the Kyoto-Protocol. Which sectors and gases are covered as of 2013 The ETS covers installations performing specified activities. Since the start it has covered, above certain capacity thresholds, power stations and other combustion plants, oil refineries, coke ovens, iron and steel plants and factories making cement, glass, lime, bricks, ceramics, pulp, paper and board. As for greenhouse gases, it currently only covers carbon dioxide emissions, with the exception of the Netherlands, which has opted in emissions from nitrous oxide. As from 2013, the scope of the ETS will be extended to also include other sectors and greenhouse gases. CO 2 emissions from petrochemicals, ammonia and aluminium will be included, as will N2O emissions from the production of nitric, adipic and glyocalic acid production and perfluorocarbons from the aluminium sector. The capture, transport and geological storage of all greenhouse gas emissions will also be covered. These sectors will receive allowances free of charge according to EU-wide rules, in the same way as other industrial sectors already covered. As of 2012, aviation will also be included in the EU ETS. Will small installations be excluded from the scope A large number of installations emitting relatively low amounts of CO 2 are currently covered by the ETS and concerns have been raised over the cost-effectiveness of their inclusion. As from 2013, Member States will be allowed to remove these installations from the ETS under certain conditions. The installations concerned are those whose reported emissions were lower than 25 000 tonnes of CO 2 equivalent in each of the 3 years preceding the year of application. For combustion installations, an additional capacity threshold of 35MW applies. In addition Member States are given the possibility to exclude installations operated by hospitals. The installations may be excluded from the ETS only if they will be covered by measures that will achieve an equivalent contribution to emission reductions. How many emission credits from third countries will be allowed For the second trading period, Member States allowed their operators to use significant quantities of credits generated by emission-saving projects undertaken in third countries to cover part of their emissions in the same way as they use ETS allowances. The revised Directive extends the rights to use these credits for the third trading period and allows a limited additional quantity to be used in such a way that the overall use of credits is limited to 50 of the EU-wide reductions over the period 2008-2020. For existing installations, and excluding new sectors within the scope, this will represent a total level of access of approximately 1.6 billion credits over the period 2008-2020. In practice, this means that existing operators will be able to use credits up to a minimum of 11 of their allocation during the period 2008-2012, while a top-up is foreseen for operators with the lowest sum of free allocation and allowed use of credits in the 2008-2012 period. New sectors and new entrants in the third trading period will have a guaranteed minimum access of 4.5 of their verified emissions during the period 2013-2020. For the aviation sector, the minimum access will be 1.5. The precise percentages will be determined through comitology. These projects must be officially recognised under the Kyoto Protocols Joint Implementation (JI) mechanism (covering projects carried out in countries with an emissions reduction target under the Protocol) or Clean Development Mechanism (CDM) (for projects undertaken in developing countries). Credits from JI projects are known as Emission Reduction Units (ERUs) while those from CDM projects are called Certified Emission Reductions (CERs). On the quality side only credits from project types eligible for use in the EU trading scheme during the period 2008-2012 will be accepted in the period 2013-2020. Furthermore, from 1 January 2013 measures may be applied to restrict the use of specific credits from project types. Such a quality control mechanism is needed to assure the environmental and economic integrity of future project types. To create greater flexibility, and in the absence of an international agreement being concluded by 31 December 2009, credits could be used in accordance with agreements concluded with third countries. The use of these credits should however not increase the overall number beyond 50 of the required reductions. Such agreements would not be required for new projects that started from 2013 onwards in Least Developed Countries. Based on a stricter emissions reduction in the context of a satisfactory international agreement . additional access to credits could be allowed, as well as the use of additional types of project credits or other mechanisms created under the international agreement. However, once an international agreement has been reached, from January 2013 onwards only credits from projects in third countries that have ratified the agreement or from additional types of project approved by the Commission will be eligible for use in the Community scheme. Will it be possible to use credits from carbon sinks like forests No. Before making its proposal, the Commission analysed the possibility of allowing credits from certain types of land use, land-use change and forestry (LULUCF) projects which absorb carbon from the atmosphere. It concluded that doing so could undermine the environmental integrity of the EU ETS, for the following reasons: LULUCF projects cannot physically deliver permanent emissions reductions. Insufficient solutions have been developed to deal with the uncertainties, non-permanence of carbon storage and potential emissions leakage problems arising from such projects. The temporary and reversible nature of such activities would pose considerable risks in a company-based trading system and impose great liability risks on Member States. The inclusion of LULUCF projects in the ETS would require a quality of monitoring and reporting comparable to the monitoring and reporting of emissions from installations currently covered by the system. This is not available at present and is likely to incur costs which would substantially reduce the attractiveness of including such projects. The simplicity, transparency and predictability of the ETS would be considerably reduced. Moreover, the sheer quantity of potential credits entering the system could undermine the functioning of the carbon market unless their role were limited, in which case their potential benefits would become marginal. The Commission, the Council and the European Parliament believe that global deforestation can be better addressed through other instruments. For example, using part of the proceeds from auctioning allowances in the EU ETS could generate additional means to invest in LULUCF activities both inside and outside the EU, and may provide a model for future expansion. In this respect the Commission has proposed to set up the Global Forest Carbon Mechanism that would be a performance-based system for financing reductions in deforestation levels in developing countries. Besides those already mentioned, are there other credits that could be used in the revised ETS Yes. Projects in EU Member States which reduce greenhouse gas emissions not covered by the ETS could issue credits. These Community projects would need to be managed according to common EU provisions set up by the Commission in order to be tradable throughout the system. Such provisions would be adopted only for projects that cannot be realised through inclusion in the ETS. The provisions will seek to ensure that credits from Community projects do not result in double-counting of emission reductions nor impede other policy measures to reduce emissions not covered by the ETS, and that they are based on simple, easily administered rules. Are there measures in place to ensure that the price of allowances wont fall sharply during the third trading period A stable and predictable regulatory framework is vital for market stability. The revised Directive makes the regulatory framework as predictable as possible in order to boost stability and rule out policy-induced volatility. Important elements in this respect are the determination of the cap on emissions in the Directive well in advance of the start of the trading period, a linear reduction factor for the cap on emissions which continues to apply also beyond 2020 and the extension of the trading period from 5 to 8 years. The sharp fall in the allowance price during the first trading period was due to over-allocation of allowances which could not be banked for use in the second trading period. For the second and subsequent trading periods, Member States are obliged to allow the banking of allowances from one period to the next and therefore the end of one trading period is not expected to have any impact on the price. A new provision will apply as of 2013 in case of excessive price fluctuations in the allowance market. If, for more than six consecutive months, the allowance price is more than three times the average price of allowances during the two preceding years on the European market, the Commission will convene a meeting with Member States. If it is found that the price evolution does not correspond to market fundamentals, the Commission may either allow Member States to bring forward the auctioning of a part of the quantity to be auctioned, or allow them to auction up to 25 of the remaining allowances in the new entrant reserve. The price of allowances is determined by supply and demand and reflects fundamental factors like economic growth, fuel prices, rainfall and wind (availability of renewable energy) and temperature (demand for heating and cooling) etc. A degree of uncertainty is inevitable for such factors. The markets, however, allow participants to hedge the risks that may result from changes in allowances prices. Are there any provisions for linking the EU ETS to other emissions trading systems Yes. One of the key means to reduce emissions more cost-effectively is to enhance and further develop the global carbon market. The Commission sees the EU ETS as an important building block for the development of a global network of emission trading systems. Linking other national or regional cap-and-trade emissions trading systems to the EU ETS can create a bigger market, potentially lowering the aggregate cost of reducing greenhouse gas emissions. The increased liquidity and reduced price volatility that this would entail would improve the functioning of markets for emission allowances. This may lead to a global network of trading systems in which participants, including legal entities, can buy emission allowances to fulfil their respective reduction commitments. The EU is keen to work with the new US Administration to build a transatlantic and indeed global carbon market to act as the motor of a concerted international push to combat climate change. While the original Directive allows for linking the EU ETS with other industrialised countries that have ratified the Kyoto Protocol, the new rules allow for linking with any country or administrative entity (such as a state or group of states under a federal system) which has established a compatible mandatory cap-and-trade system whose design elements would not undermine the environmental integrity of the EU ETS. Where such systems cap absolute emissions, there would be mutual recognition of allowances issued by them and the EU ETS. What is a Community registry and how does it work Registries are standardised electronic databases ensuring the accurate accounting of the issuance, holding, transfer and cancellation of emission allowances. As a signatory to the Kyoto Protocol in its own right, the Community is also obliged to maintain a registry. This is the Community Registry, which is distinct from the registries of Member States. Allowances issued from 1 January 2013 onwards will be held in the Community registry instead of in national registries. Will there be any changes to monitoring, reporting and verification requirements The Commission will adopt a new Regulation (through the comitology procedure) by 31 December 2011 governing the monitoring and reporting of emissions from the activities listed in Annex I of the Directive. A separate Regulation on the verification of emission reports and the accreditation of verifiers should specify conditions for accreditation, mutual recognition and cancellation of accreditation for verifiers, and for supervision and peer review as appropriate. What provision will be made for new entrants into the market Five percent of the total quantity of allowances will be put into a reserve for new installations or airlines that enter the system after 2013 (new entrants). The allocations from this reserve should mirror the allocations to corresponding existing installations. A part of the new entrant reserve, amounting to 300 million allowances, will be made available to support the investments in up to 12 demonstration projects using the carbon capture and storage technology and demonstration projects using innovative renewable energy technologies. There should be a fair geographical distribution of the projects. In principle, any allowances remaining in the reserve shall be distributed to Member States for auctioning. The distribution key shall take into account the level to which installations in Member States have benefited from this reserve. What has been agreed with respect to the financing of the 12 carbon capture and storage demonstration projects requested by a previous European Council The European Parliaments Environment Committee tabled an amendment to the EU ETS Directive requiring allowances in the new entrant reserve to be set aside in order to co-finance up to 12 demonstration projects as requested by the European Council in spring 2007. This amendment has later been extended to include also innovative renewable energy technologies that are not commercially viable yet. Projects shall be selected on the basis of objective and transparent criteria that include requirements for knowledge sharing. Support shall be given from the proceeds of these allowances via Member States and shall be complementary to substantial co-financing by the operator of the installation. No project shall receive support via this mechanism that exceeds 15 of the total number of allowances (i. e. 45 million allowances) available for this purpose. The Member State may choose to co-finance the project as well, but will in any case transfer the market value of the attributed allowances to the operator, who will not receive any allowances. A total of 300 million allowances will therefore be set aside until 2015 for this purpose. What is the role of an international agreement and its potential impact on EU ETS When an international agreement is reached, the Commission shall submit a report to the European Parliament and the Council assessing the nature of the measures agreed upon in the international agreement and their implications, in particular with respect to the risk of carbon leakage. On the basis of this report, the Commission shall then adopt a legislative proposal amending the present Directive as appropriate. For the effects on the use of credits from Joint Implementation and Clean Development Mechanism projects, please see the reply to question 20. What are the next steps Member States have to bring into force the legal instruments necessary to comply with certain provisions of the revised Directive by 31 December 2009. This concerns the collection of duly substantiated and verified emissions data from installations that will only be covered by the EU ETS as from 2013, and the national lists of installations and the allocation to each one. For the remaining provisions, the national laws, regulations and administrative provisions only have to be ready by 31 December 2012. The Commission has already started the work on implementation. For example, the collection and analysis of data for use in relation to carbon leakage is ongoing (list of sectors due end 2009). Work is also ongoing to prepare the Regulation on timing, administration and other aspects of auctioning (due by June 2010), the harmonised allocation rules (due end 2010) and the two Regulations on monitoring and reporting of emissions and verification of emissions and accreditation of verifiers (due end 2011).Questions and answers on the proposal to revise the EU emissions trading system (EU ETS) Brussels, 15 July 2015 See also: Press release. Transforming Europes energy system - Commissions energy summer package leads the way (15 July 2015) 1. Why has the Commission proposed today a revision of EU ETS The European Commission has presented a legislative proposal to revise the EU Emissions Trading System (ETS) in line with the 2030 climate and energy policy framework agreed by the EU leaders in October 2014. The proposal is an integral part of the work on achieving a resilient Energy Union with a forward-looking climate policy a top political priority of the Juncker Commission, launched in February 2015. This is the first step in delivering on the EUs target to reduce greenhouse gas emissions by at least 40 domestically by 2030 as part of its contribution to the new global climate deal due to be adopted in Paris this December. This proposal sends a strong message to the international community at a critical moment when other major players such as G7 and China have also shown their firm determination. The EU ETS is the largest carbon market in the world. Todays proposal aims to ensure that the EU ETS the cornerstone of EU climate policy remains the most efficient way to cut emissions in the decade to come. It can thereby build on the experiences by companies and public authorities from the first decade of its implementation. The EU ETS should continue to inspire other international partners, such as China, to use carbon pricing as a cost-effective driver for a gradual but sustainable decarbonisation of their economies for the benefit of future generations. Ambitious climate action creates businesses opportunities and opens up new markets for low-carbon technologies. Todays proposal confirms that climate action and competitiveness go hand in hand. The revised EU ETS will provide stronger incentives for innovation and continue to ensure that European industries remain competitive on international markets. Additional funds from the EU ETS are provided for low-carbon innovation for the first time also for energy-intensive industry and for the modernisation of the energy systems in lower-income Member States. This will further stimulate the uptake of renewables and other low-carbon and energy-efficient technologies which are, alongside decarbonisation, further key objectives of the Energy Union. Finally, a revised EU ETS based on the recently agreed Market Stability Reserve will reinforce the functioning of the internal energy market and provide better long-term price signals for investments. Todays EU ETS proposal will therefore contribute to a better functioning European wide electricity market which is the best means to ensure that electricity can be delivered to private consumers and industries in the most cost-efficient way. 2. How will the revision benefit EU citizens, industry and Member States The proposed revision delivers multiple environmental and economic benefits. It will help tackle climate change by increasing the pace of EU efforts to cut greenhouse gas emissions. Cutting emissions also reduces air pollution, to the benefit of citizens health. Moreover, it makes Europe less dependent on imported fossil fuels. This proposal advocates for a stronger, better functioning EU ETS that helps putting the EU on track towards a low-carbon economy. It brings significant opportunities for business and industry to develop and profit from new technologies and markets, supports innovation and helps create new opportunities for jobs and growth. The proposal also supports the low-carbon transition by providing more funds to address investment needs in lower-income Member States. At the same time, the Commission recognises that there may be risks for some businesses exposed to international competition, as long as no comparable climate efforts are undertaken in other major economies. Thats why the proposal also includes safeguards for the international competitiveness of EU energy intensive industries. Important focus is given to reducing administrative burdens. Under the proposal, Member States will continue to be able to exclude small emitters from the EU ETS, including small and medium-sized enterprises with low emissions, as long as they are subject to equivalent measures. 3. How does the EU ETS revision contribute to international climate efforts EU emissions reductions will be an important contribution to the international effort to limit the global average temperature increase to below 2C compared to pre-industrial levels. The economy-wide at least 40 target illustrates the EUs continued commitment to securing an ambitious global climate deal with legally binding commitments from all Parties in Paris this December. Todays proposal continues this effort by presenting the first of the main steps in delivering on this ambitious emissions reduction target. The decisions to be adopted in Paris are expected to mobilise climate finance, technology transfer and capacity building for eligible parties, particularly those with the fewest capabilities. Public sector climate finance will continue to play an important role in mobilising resources after 2020. In anticipation of these decisions, todays proposal calls on Member States to use a share of their EU ETS auction revenues to finance climate action in countries outside the EU, including for actions to adapt to the impacts of climate change. It will be on Member States to devote part of these revenues from the emissions trading scheme to support climate mitigation actions in third countries, including development countries. 4. How will the ETS revision affect the total amount of allowances The overall quantity of allowances will decline by 2.2 every year starting from 2021. Since 2013, the main method of distributing EU ETS allowances has been through auctioning by Member States. Over the current trading period (2013 to 2020), 57 of the total amount of allowances will be auctioned, while the remaining allowances are available for free allocation. The share of allowances to be auctioned will remain the same after 2020. The revenues from auctioning provide Member States with funding that can be used for different actions, such as renewable energy programmes. They can also be directed to social policy measures to support a just and fair transition towards a low-carbon economy for companies, their workers and consumers, in addition to supporting international climate action efforts in third countries including developing countries. 5. How will the system of free allocation be improved after 2020 As the total number of allowances is limited and declining, the system of free allocation needs to be revised in order to distribute the available allowances in the most effective and efficient way. The proposed changes aim to minimise the need for a correction factor1 and to ensure predictability for companies. The allocation of free allowances will be focused on the sectors at highest risk of relocating their production outside the EU. The basic architecture will remain in place after 2020, while individual elements will be improved in line with the agreement reached by EU leaders in October 2014: Benchmark values will be updated to capture technological progress in the different sectors. Current values are determined based on data from 2007-2008 and would not reflect the state of technology after 2020. Production data - the system will be more flexible by better taking into account production increases or decreases and adjusting the amount of free allocation accordingly. A specific number of free allowances will be set aside for new and growing installations. Carbon leakage as currently, beyond 2020 all major industrial sectors will be considered at risk of carbon leakage. Indirect carbon costs 2 Member States are encouraged to use auction revenue to provide compensation in line with state aid rules. 6. How will the EU ETS support low-carbon innovation An Innovation Fund will be set up to support first-of-a-kind investments in renewable energy, carbon capture and storage (CCS) and low-carbon innovation in energy intensive industry. Some 400 million allowances representing up to around EUR 10 billion when sold will be reserved from 2021 onwards for this purpose. In addition, a further 50 million of the unallocated allowances3 from 2013-2020 will be set aside to enable the Innovation Fund to start before 2021 and include projects to support breakthrough technologies in industry4 . The Innovation Fund builds on the success of the existing funding programme to support low-carbon innovation using the proceeds from 300 million allowances during 2013-2020 (the so-called NER 300 ). 7. What are the objectives of the Modernisation Fund The aim of the Modernisation Fund is to support lower income Member States in meeting the high investment needs relating to energy efficiency and the modernisation of their energy systems. Between 2021 and 2030, 2 of the allowances, some 310 million allowances in total, will be set aside to establish the fund. All Member States will contribute to the fund, which will benefit 10 Member States with a GDP per capita of less than 60 of the EU average (in 2013). The countries eligible to receive support are: Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia. The ETS Directive should establish a governance structure for the Modernisation Fund involving Member States, the European Investment Bank, and the Commission. 8. How does the EU ETS revision affect the Market Stability Reserve The recent agreement on the Market Stability Reserve (MSR) enables unallocated allowances to be transferred to the MSR in 2020. Under this rule, analysts estimate that some 550 to 700 million allowances may be transferred into the MSR in 2020. Following a request by the Parliament and Council to consider the use of unallocated allowances after 2020, the Commission proposes to use 250 million unallocated allowances from 2013-2020 to establish a reserve for new and growing installations. 9. Was there a public consultation on this proposal Member States, industry representatives, NGOs, research and academic institutions, trade unions and citizens were involved at various stages in the development of this proposal. Extensive stakeholder consultations were carried out in 2014 on various technical aspects of the EU ETS. The Commission received more than 500 contributions which have been taken into account in preparing this proposal. Following these consultations and the analysis of EU climate policy targets for 2030, the Commission carried out an impact assessment of the EU ETS revision which is also published todaysee (Documentation ). The legislative proposal has been submitted to the European Parliament and to the Council for adoption as well as to the Economic and Social Committee and the Committee of the Regions for opinion. The Commission will work with these institutions to see this legislation through. Citizens and stakeholders can give their views on this proposal over the next eight weeks. These will be fed into the legislative debate and presented to the European Parliament and Council. For further details please refer to the additional questions on DG Clima website. Please also see infographic in the Attachment to this fact sheet. 1 The cross-sectoral correction factor reduces the free allocation across all sectors if the claim for free allowances is higher than the available amount. 2 Indirect carbon costs arise mainly for electricity intensive industries due to carbon costs being passed on to them in the price of electricity. 3 Unallocated allowances are those which were initially earmarked for free allocation but were not allocated due to closures of companies or reductions in production. 4 For example carbon capture and use demonstration projects