Participating in the EU Emissions Trading System (EU ETS)

The European Union Emissions Trading System (EU ETS) is the leading climate policy instrument in the Euro- pean Union (EU). This paper aims at providing a state-of-the-art overview of .

Industrial installations covered by the EU Emissions Trading System EU ETS are required to have an approved monitoring plan, according to which they monitor and report their emissions during the year. Find out how to bid for carbon allowances and aviation allowances in forthcoming Phase III emissions auctions.

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The EU ETS data viewer provides an easy access to emission trading data contained in the European Union Transaction Log (EUTL). The EUTL is a central transaction log, run by the European Commission, which checks and records all transactions taking place within the trading system.

The EU cap will reduce the number of available allowances by 1. The trajectory will be calculated from a departure point of the mid-point of Phase II and will describe a declining cap from onwards.

All sectors covered by the EU ETS , with the exception of most of the EU power sector, are provided with a free allocation of allowances in order to assist with their transition towards a low carbon economy. In addition, industrial sectors at significant risk of competition from countries without similar carbon costs see section on carbon leakage in the EU ETS for more information are eligible to receive a higher proportion of allowances for free.

It also announced that a cross sectoral correction factor was required to ensure that free allocation across the EU remains within the cap set in the ETS Directive. The average reduction of allocation is therefore This list will be updated on an annual basis to take into account further changes to allocation over the course of the phase.

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Please tell us what format you need. It will help us if you say what assistive technology you use. PDF , KB , 24 pages. MS Excel Spreadsheet , PDF , KB , 32 pages. PDF , KB , 31 pages. PDF , KB , 14 pages. The final details of this data collection will be confirmed before the end of the year. If the government considers the data collected as part of this exercise to be useful to the design and implementation of a non- EU ETS post- EU exit carbon pricing scheme, the government will also use the data collected for this purpose.

The deadline for operators to provide verified data to their regulator is expected to be on or around 31 May and should be confirmed in September. Over the coming months regulators will be communicating regularly to ensure that operators understand what will be required and enable them to make the necessary preparations.

To note the NIMs collection covers stationary installations only. Aviation operators will not need to participate.

Further technical information on the NIMs requirements for UK operators will be circulated by regulators in due course. Carbon leakage is a term used to describe the prospect of an increase in global greenhouse gas emissions when a company shifts production or investment outside the EU because - in the absence of an legally binding international climate agreement - they are unable to pass on the cost increases induced by the EU ETS to their customers without significant loss of market share.

The best way to address carbon leakage would be a legally binding international climate agreement. This would create a level playing field for industry inside and outside the EU with respect to accounting for the costs of carbon. The second mechanism allows Member States to compensate sectors at significant risk of carbon leakage as a result of indirect EU ETS costs ie through EU ETS -related increases in electricity prices , provided that schemes are designed within the framework set by the European Commission see section on indirect carbon leakage compensation scheme for more information.

The UK government strongly supports the principle of free allocation in the absence of an international climate agreement. We believe that the proportionate free allocation of allowances gives relief to sectors at significant risk of carbon leakage, without raising barriers to international trade.

The UK government recognises industry concerns around competitiveness and carbon leakage and is committed to ensuring that sectors genuinely at significant risk of carbon leakage are protected from this risk. In June , we published a research project commissioned by the Department of Energy and Climate Change and undertaken by Vivid Economics and Ecofys , which investigates the occurrence of carbon leakage so far and the fundamental drivers of carbon leakage for a selection of industrial sectors and assesses the measures in place for its mitigation.

The report models the risk of carbon leakage for 24 industrial sectors, and was produced in consultation with industry stakeholders. Modelling analysis shows that in the absence of any mitigating policy measures such as free allocation of allowances , no allowance for carbon abatement potential, and no increase in carbon regulation outside of the European Union, a number of sectors are at risk of leakage.

Given these assumptions, the modelling analysis shows higher rates of carbon leakage than would be expected to occur in reality. The views expressed in the report are those of its writers, and do not represent an official position of the UK government.

Sectors at risk of carbon leakage are assessed against a set of criteria and thresholds set out in the EU ETS Directive. The list of sectors deemed at risk of leakage for the period were agreed through the EU comitology procedure in December , with additions to the list made in subsequent European Commission Decisions. The EU ETS Directive allows for a review of sectors at risk every five years, with the possibility of adding sectors to the list on annual, ad hoc basis.

On 5 May , the European Commission published its draft list of sectors for the period , based on the quantitative and qualitative criteria set out in the ETS Directive. The draft carbon leakage list was presented to the EU Climate Change Committee for vote, after which it was sent to the European Parliament and the Council for 3 months scrutiny before adoption.

As part of this, the government has committed to compensate the most electricity-intensive businesses to help offset the indirect cost of the Carbon Price Floor and the EU ETS , subject to state aid guidelines.

These guidelines list the sectors deemed to be exposed to a significant risk of carbon leakage due to indirect emissions costs, and provide details of the maximum levels of compensation that can be made available to them.

Any Member State compensation scheme must be designed within the framework set by the European Commission. In October , DECC and BIS launched the energy intensive industries compensation scheme consultation , which set out our proposals for the eligibility and design of the compensation package.

The consultation, which closed in December , provided an opportunity for all those interested in the package to comment on the proposals, helping us ensure that compensation is targeted at those companies who are most at risk of carbon leakage as a result of energy and climate change policies.

For Carbon Price Floor compensation, which remains subject to state aid approval from the European Commission, we expect to publish guidance later in the summer and begin payments shortly thereafter.

Full details can be viewed at on the Energy-intensive industries: The New Entrants Reserve NER is a set aside of EU allowances, reserved for new operators or existing operators who have significantly increased capacity. Operators starting a new entrant activity must submit an NER application to their regulator within 12 months of starting normal operation of the new or extended activity.

The EU ETS Regulators are responsible for enforcing compliance with the EU ETS Regulations, including operational functions such as granting and maintaining permits and emissions plans for aviation , monitoring and reporting including monitoring plans , assessing verified emission reports and tonne-kilometre reports , assessing applications to the NER , determining reductions in allocations as a result of changes in capacity or cessation of activities, exchanging of information with UKAS on verifier activities.

The determination is published in November each year:. The consultation closed on 19 September An EU ETS operator must propose a monitoring plan when applying for a greenhouse gas emissions permit or emissions plan for aviation operators. The reporting year runs from 1 January to 31 December each year. The EU ETS requires all annual emissions reports and monitoring to be verified by an independent verifier in accordance with the Accreditation and Verification Regulation.

A verifier will check for inconsistencies in monitoring with the approved plan and whether the data in the emissions report is complete and reliable. In the UK, these requirements are demonstrated by being accredited. All verifiers are required to demonstrate that they are either accredited or certified in accordance with the Accreditation and Verification Regulation.

Operators are responsible for ensuring that their verifier is accredited for the relevant scope of work. It is advisable to do this when you have a client in the UK.

To apply for a verifier Registry account, email etregistryhelp environment-agency. The national factors are Tier 2 and Tier 2a emission factors and net calorific values for specific fuels used by particular industries. This data means the data referred to in Article 31 1 of the Monitoring and Reporting Regulation. Emission factors and calorific values for MS Excel Spreadsheet , The EU ETS Directive requires Member States to put in place a system of penalties which is effective, proportionate and dissuasive but the nature of the penalties is largely left to Member State discretion with the exception of the penalty for failure to surrender sufficient allowances in certain circumstances.

In England and Wales appeals for both operators of stationary installations and aircraft operators, as well as offshore installations, are heard by the First-tier Tribunal. Different arrangements apply to appeals brought by aviation operators against a penalty notice served under the Aviation Greenhouse Gas Emissions Trading Scheme Regulations for the scheme year.

The relevant rules under the Regulations continue to apply in relation to any appeal brought against any decision made or notice served under the Regulations. These provide that the appeal body is the Secretary of State or an independent person appointed by the Secretary of State. Guidance on the appeals process. A major revision approved in in order to strengthen the system means the third phase is significantly different from the two previous phases and is based on rules which are far more harmonised than before.

For period the system for allocating emission allowances will have many change compared to the two previous trading periods.

Firstly , emission allowances will be distributed according to fully harmonised and EU-wide rules, meaning that the same rules will apply across all EU Member States. Secondly , auctioning will be the rule for the power sector, which means that the majority of allowances under the EU Emissions Trading System will not anymore be allocated for free.

A benchmark does not represent an emission limit or even an emission reduction target but merely a threshold for the level of free allocation of an individual installation. An exception is made for activities that are deemed to be exposed to a significant risk of carbon leakage.

EMICERT ltd is the first body from Greece that was accredited for the verification of the historical activity data of the installations that apply for free allowances for period State of the art sampling and emissions measuring systems, high standard personnel competency, experienced sampling team and deep understanding of industrial processes make us the ideal choice for emission monitoring and industrial process testing projects.

We offer international coverage and provision of fast service response. We have an extensive scope of accreditation and worked with large combustion plants, waste incineration, cement, steel and metal industries, chemical and fertilizers, etc.