1 / 17

The review of the EU Emissions Trading Scheme

The review of the EU Emissions Trading Scheme. Stefan Moser Market-based Instruments Unit DG Environment European Commission. Milan, 9 May 2007 Carbon trading and the emission trading schemes . Role and importance of EU ETS.

antoinette
Télécharger la présentation

The review of the EU Emissions Trading Scheme

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. The review of theEU Emissions Trading Scheme Stefan MoserMarket-based Instruments Unit DG Environment European Commission Milan, 9 May 2007 Carbon trading and the emission trading schemes

  2. Role and importance of EU ETS • The cornerstone of the EU’s market-based strategy to reduce greenhouse gas (GHG) emissions cost-effectively • EU Heads of State have confirmed need to limit global temperature increase to 2º Celsius above pre-industrial levels (3.6° Fahrenheit) • This requires industrialised countries to reduce GHG emissions by 30% below 1990 levels by 2020, domestically or through emissions trading mechanisms, increasing to 60-80% reductions by 2050 • The main driver for the global carbon market currently involving 168 countries and transactions valued at €14.6 billion in 2006 • An essential structural element for long-term global strategies to avoid dangerous climate change

  3. Development of EU ETS: volumes Source: Point Carbon

  4. Development of EU ETS: prices Allowances prices for Phase I (blue line) and Phase II (red line) Source: Point Carbon

  5. Stages of development of EU ETS: Start-up period 2005-07 • Allowances mostly allocated for free (auctioning limited to 5%) • Robust emissions monitoring and verification • Efficient electronic registry system • Sound market development • However, insufficiently ambitious levels for emission reductions

  6. Evolution/regulatory changes in 2008-12 • 2008-12: First commitment period of Kyoto Protocol • Commission approval given to 10 plans in November 2006 followed by another seven (eight) from January to April 2007 • Fair and equal treatment being given to all MSs • Fine-tuning and improvement of the infrastructure • Revised monitoring and reporting rules • Revised registries regulation • Opt-in of the first non-CO2 emissions • Netherlands and France have requested the inclusion of installations in the fertiliser industry emitting N2O • Gradual integration of carbon capture and storage (CCS) • Increased harmonisation of the coverage of combustion installations (e.g. chemical crackers) • Aviation will be integrated into the EU ETS as of 2011 – Commission proposal of December 2006

  7. The EU ETS Review • Commission Communication COM(2006)676: Building a global carbon market • Identified four areas for review: • Scope of the Directive • Further harmonisation and increased predictability • Robust compliance and enforcement • Linking with emission trading schemes in third countries • In addition, consideration being given to: • Institutional and procedural aspects • Relationship between EU ETS and other market based regulatory instruments

  8. What the review is about • Improve the functioning of the scheme based on practical implementation and experience • Relevant for periods from 2013 onwards, as markets need regulatory stability • Expand coverage – further sectors and gases, beyond aviation • N20, CH4, carbon capture and storage • Streamline design of the EU ETS • More harmonised approach to cap-setting and allocation • More predictability and certainty • More harmonised approach to new entrants and closures • Harmonisation of accreditation and verification

  9. Implementation of the Review • European Climate Change Programme (ECCP) • Multi-stakeholder consultative process • Consultation on review to take place within ECCP group on emission trading • Interested parties are invited to submit their views and share their practical experience with the Commission • env-ets-review@ec.europa.eu • Member States’ Report of on implementation of the EU ETS (‘Article 21 Reports’) • LIFE project ‘LETS Update’ • Reports on various aspects to be discussed in the review available from • http://ec.europa.eu/environment/climat/emission/review_en.htm

  10. Issue 1: Scope of the Directive • More consistent application of current scope: • Clarity on specific types of combustion installations including more specific technical description with a view to facilitating harmonised application in Member States • cost-effectiveness of covering small installations • Expansion of the EU ETS: • Inclusion of other greenhouse gases where feasible and appropriate (N2O, CH4) • Harmonised inclusion of additional activities • Opt-in provisions of the Directive • Carbon dioxide capture and geological storage • Emission reduction projects within the Community

  11. Issue 2: Robust compliance and enforcement • Monitoring and reporting: • Guidelines to be laid down in a Regulation • Possible revision and extension of Annex IV of the Directive • Means to ensure EU-wide minimum standards of application in practice of monitoring and reporting • Verification • Ensure improved stringency and oversight of verification and accreditation process in Member States including possible Community level accreditation • Internal market aspects • EU-wide Regulation for verification and accreditation • Compliance provisions • Enforcement of verification process • Harmonisation of existing compliance provisions

  12. Issue 3: Further harmonisation and increased predictability (1) • Setting of a cap • EU wide cap or more harmonised national cap setting • Various options to each possibility • Extension of allocation certainty to increase predictability • Predictability • Review intervals • Cap setting complemented by equal time horizons for allocation

  13. Issue 3: Further harmonisation and increased predictability (2) • Allocation of allowances to sectors and installations • Harmonised allocation methodologies and rules to increase objectiveness and transparency • Auctioning, benchmarking? • Sector specific allocation? • Allocations based on projections, emissions data, efficiency parameters? • Matter of pass-through of allowance prices • Auctioning and specific issues related to it • Share, nationally or EU-wide, schedules, design, market impact • Auctions under national or EU-wide caps • Benchmarking • Applicability, EU-wide or national, number of factors • Based on input, output, data availability, transparency issues etc

  14. Issue 3: Further harmonisation and increased predictability (3) • New entrants • Harmonised approach to new entrants • Reserves or not • Harmonised allocation rules from any reserve • Definition of new entrants • Closure of installations • Harmonised approach • Monitoring and reporting • Cost-effective solutions for providing information to the market on actual emissions so as to ensure optimal market transparency

  15. Issue 4: Linking provisions • Relationship of EU ETS to third country schemes • Possibility of linking EU ETS with third country schemes • Extension to arrangements within third countries ratified or not ratified the Kyoto Protocol • Involvement of developing countries and countries in economic transition in emissions abatement efforts through JI and CDM • How to strengthen these countries participation in abatement activities • Community-level arrangements for authorisation of projects • Possibility of further harmonising KP project credits accepted by MS • Harmonising the percentages of KP project credits

  16. Concluding thoughts • Europe leads the way in turning the concept of market-based climate policy into reality and a continent-wide carbon price signal has emerged. • The EU ETS in its current shape is the first step in an evolution to a global carbon market. • The review process is the opportunity to decide on the future strategic direction for the EU ETS • Review process faces a trade-off between quality and quantity and needs to build on experience. • A simple scheme will be more likely to fulfil its promise and provide blueprint for other schemes.

  17. More information on EU climate policy:http://europa.eu.int/comm/environment/climat/home_en.htm

More Related