The European Union Emission Trading System (EU ETS) is the largest multi-national, emissions trading scheme in the world, and is a major pillar of EU climate policy. The ETS currently covers more than 10,000 installations with a net heat excess of 20 MW in the energy and industrial sectors which are collectively responsible for close to half of the EU's emissions of CO2 and 40% of its total greenhouse gas emissions.
Under the EU ETS, large emitters of carbon dioxide within the EU must monitor and annually report their CO2 emissions, and they are obliged every year to return an amount of emission allowances to the government that is equivalent to their CO2 emissions in that year. In order to neutralise annual irregularities in CO2-emission levels that may occur due to extreme weather events (such as harsh winters or very hot summers), emission allowances for any plant operator subject to the EU ETS are given out for a sequence of several years at once. Each such sequence of years is called a Trading Period. The 1st EU ETS Trading Period expired in December 2007; it had covered all EU ETS emissions since January 2005. With its termination, the 1st phase EU allowances became invalid. Since January 2008, the 2nd Trading Period is under way which will last until December 2012. Currently, the installations get the allowances for free from the EU member states' governments. Besides receiving this initial allocation on a plant-by-plant basis, an operator may purchase EU allowances from others (installations, traders, the government.) If an installation has received more free allowances than it needs, it may sell them to anybody.
In January 2008, the European Commission proposed a number of changes to the scheme, including centralized allocation (no more national allocation plans) by an EU authority, a turn to auctioning a greater share (60+ %) of permits rather than allocating freely, and inclusion of other greenhouse gases, such as nitrous oxide and perfluorocarbons. These changes are still in a draft stage; the mentioned amendments are only likely to become effective from January 2013 onwards, i.e. in the 3rd Trading Period under the EU ETS. Also, the proposed caps for the 3rd Trading Period foresee an overall reduction of greenhouse gases for the sector of 21% in 2020 compared to 2005 emissions. The EU ETS has recently been extended to the airline industry as well, but these changes will not take place until 2012.
From http://en.wikipedia.org/
Showing posts with label Carbon emissions trading schemes in the European Union. Show all posts
Showing posts with label Carbon emissions trading schemes in the European Union. Show all posts
Monday, December 7, 2009
EU Allowances
EU Allowances are Climate credits (or Carbon credits) used in the European Union Emissions Trading Scheme (EU ETS). EU Allowances are issued by the EU Member States into Member State Registry accounts. By April 30 of each year, operators of installations covered by the EU ETS must surrender an EU Allowance for each ton of CO2 emitted in the previous year.
From http://en.wikipedia.org/
From http://en.wikipedia.org/
Sunday, December 6, 2009
Carbon Reduction Commitment
The Carbon Reduction Commitment (CRC) is a proposed mandatory cap and trade scheme in the United Kingdom that will apply to large non energy-intensive organisations in the public and private sectors. It is anticipated that the scheme will have cut carbon emissions by 1.2 million tonnes of carbon per year by 2020. The British Government first committed to cutting UK carbon emissions by 60% by 2050, compared to 1990 levels, then in October 2008 changed the commitment to 80% by 2050.
The Carbon Reduction Commitment was announced in the 2007 Energy White Paper, published on May 23, 2007. A consultation in 2006 showed strong support for it to be mandatory, rather than voluntary. The Commitment is to be introduced under enabling powers planned for inclusion in the Climate Change Bill. A consultation into the scheme's implementation was launched in June 2007.
Coverage
The CRC scheme will apply to organisations that have a half-hourly metered electricity consumption greater than 6,000 MWh per year. Organisations qualifying for CRC would have all their energy use covered by the scheme, this includes emissions from direct energy use as well as electricity purchased. Such organisations - including hotel chains, supermarkets, banks, central government and large Local Authorities - mostly fall below the threshold for the European Union Emissions Trading Scheme, but account for around 10% of the UK carbon emissions. Emissions covered by the EU Energy Trading Scheme and by a Climate Change Agreement would be exempt from the CRC, as would organisations with more than 25% of their emissions covered by Climate Change Agreements.
Operating mechanisms
Although mandatory, the Carbon Reduction Commitment will involve self-certification of emissions, backed up by auditing, rather than third-party verification. Emission allowances are to be auctioned, with all the income from the auctions recycled back to participants by the means of an annual payment based on participants' average annual emissions since the start of the scheme, with a bonus or penalty according to the organisation's position in a CRC league table. In March 2008 the Government responded to a consultation into the implementation of the CRC. The Government is minded to proceed with an allowance price of £12/tCO2 for the introductory three year phase, although this will be confirmed in the response to the Summer 2008 consultation on the CRC regulations. It is suggested there should be two fixed price sales in the first year of the scheme.
Participants in the Carbon Reduction Commitment will also be able to purchase (but not sell) emission allowances from the EU Emissions Trading Scheme at a price that is the higher of the EU ETS price or the minimum CRC floor price.
From http://en.wikipedia.org/
The Carbon Reduction Commitment was announced in the 2007 Energy White Paper, published on May 23, 2007. A consultation in 2006 showed strong support for it to be mandatory, rather than voluntary. The Commitment is to be introduced under enabling powers planned for inclusion in the Climate Change Bill. A consultation into the scheme's implementation was launched in June 2007.
Coverage
The CRC scheme will apply to organisations that have a half-hourly metered electricity consumption greater than 6,000 MWh per year. Organisations qualifying for CRC would have all their energy use covered by the scheme, this includes emissions from direct energy use as well as electricity purchased. Such organisations - including hotel chains, supermarkets, banks, central government and large Local Authorities - mostly fall below the threshold for the European Union Emissions Trading Scheme, but account for around 10% of the UK carbon emissions. Emissions covered by the EU Energy Trading Scheme and by a Climate Change Agreement would be exempt from the CRC, as would organisations with more than 25% of their emissions covered by Climate Change Agreements.
Operating mechanisms
Although mandatory, the Carbon Reduction Commitment will involve self-certification of emissions, backed up by auditing, rather than third-party verification. Emission allowances are to be auctioned, with all the income from the auctions recycled back to participants by the means of an annual payment based on participants' average annual emissions since the start of the scheme, with a bonus or penalty according to the organisation's position in a CRC league table. In March 2008 the Government responded to a consultation into the implementation of the CRC. The Government is minded to proceed with an allowance price of £12/tCO2 for the introductory three year phase, although this will be confirmed in the response to the Summer 2008 consultation on the CRC regulations. It is suggested there should be two fixed price sales in the first year of the scheme.
Participants in the Carbon Reduction Commitment will also be able to purchase (but not sell) emission allowances from the EU Emissions Trading Scheme at a price that is the higher of the EU ETS price or the minimum CRC floor price.
From http://en.wikipedia.org/
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