EU Environmental Law, Vol IV - The EU Greenhouse Gas Emissions Trading Scheme

  • ID: 2159348
  • June 2006
  • Region: Europe
  • 470 Pages
  • Claeys & Casteels Publishing
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The EU Greenhouse Gas Emissions Trading Scheme

The EU Emissions Trading Scheme is applicable to an increasingly wide range of businesses, a trend that looks certain to continue. A thorough understanding of the law and policy that underlies this scheme is therefore essential for companies, their advisers, and their legal representatives. Understanding this framework offers real business benefits, while failure to do so can result in important lost opportunities.

Knowing when to invest in new emission rights, when to sell and when to install new, more energy efficient technology must now be an integral part of business decision-making both in the EU and internationally. This volume provides a thorough understanding of the system and its implementation, enabling companies and their advisors to master this fast developing subject.

Contents & Contributors

- The Emission Trading Scheme (ETS): The cornerstone of the EU's implementation of the Kyoto protocol

- International climate policy developments of the 1990's: the UNFCCC

- Basic design options for emissions trading

- The emissions READ MORE >

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Biography of the contributors

Table of contents

Table of appendices

Chapter 1 The Emissions Trading Scheme (ETS): The cornerstone of the EU's implementation of the Kyoto protocol
1. Introduction
2. The EU's Kyoto Protocol commitments
3. The European Climate Change Program (ECCP)
4. The EU ETS
5. The EU ETS in 20
6. Conclusion

Chapter 2 International climate policy developments of the 1990s: The UNFCCC; the Kyoto protocol; the Marrakech accords and the EU ratification decision

1. Introduction
2. International developments
2.1. The road from Buenos Aires to Marrakech
2.2. The Commission's special position in the international negotiations
3. EU measures to reduce greenhouse gas emissions
3.1. Ratification and burden-sharing, or how to achieve the target jointly and individually
3.2. The compliance system under the Kyoto Protocol
3.3. Incentives for compliance within the EU
3.4. Specific measures taken at Community level
3.4.1. The Monitoring Mechanism
3.4.2. Boosting ‘Policies and measures' under the European Climate Change Programme
4. Conclusion
4.1. Achieving the targets
4.2. Continuing leadership

Chapter 3 Basic design options for emissions trading

1. What is emissions trading?
2. Five components of emissions trading
2.1. The commitment or “entitlement”
2.2. Transfer of entitlements
2.3. Monitoring
2.4. Compliance and sanctions
2.5. Scarcity
3. Scope
4. Alternative policy instruments
5. What kind of emissions trading?
5.1. Cap and trade
5.2. Baseline and credit
5.3. Ex post verification
6. Type of target
7. Direct or indirect emissions
8. Misunderstandings about emissions trading
9. The internal market imperative for an EU scheme
10. Future issues
11. Conclusion

Chapter 4 The emissions allowance trading Directive 2003/87/EC explained

1. Introduction
2. Legal base
3. Scope
3.1. Coverage of the European Economic Area
3.2. Geographical coverage
3.3. Coverage of gases
3.4. Coverage of installations
3.5. Combustion installations
4. Greenhouse gas emissions permits
4.1. Relationship with the IPPC Directive
4.2. Application of EU ETS to direct emissions
4.3. Application of EU ETS to the operators of installations
4.4. Change in the identity of an operator
5. Method of allocation
6. National allocation plans
6.1. Content of National Allocation Plans
6.2. Procedures for National Allocation Plans
6.3. Revision of the allocation criteria
7. New entrants
8. Closures
9. Allowances
9.1. Nature of allowances and linkage with the Kyoto Protocol
9.2. Issue of allowances
9.3. Transfer of allowances
9.4. Surrender and cancellation of allowances
9.5. Banking of allowances
10. Monitoring, reporting and verification of emissions
10.1. The Commission guidelines
10.2. Linkage between monitoring under the EU ETS and the Kyoto Protocol
11. Enforcement
12. Public participation and Aarhus Convention
13. Competent authorities and Member State reporting
14. Registries
15. Climate Change Committee
16. Unilateral inclusion of additional installations (‘opt-in')
17. Links with other greenhouse gas emissions trading schemes
18. Amendment of the IPPC Directive
18.1. The IPPC framework
18.2. Interaction with the EU ETS
18.3. Emission limit values for greenhouse gases
18.4. Emission limit values for non-greenhouse gases
18.5. Energy efficiency requirements
19. Temporary exclusion of installations (‘opt-out')
20. Pooling
21. Force majeure
22. Review and further development
23. Entry into force and Implementation

Chapter 5 The EU ETS linking Directive explained

1. Introduction
2. The EU ETS: linking challenges
3. The “linking” Directive: from proposal to adoption
3.1. Elaboration of the Proposal
3.2. The Commission Proposal
3.3. The Compromise Package
4. CDM and JI in the EU ETS: opportunities and threats
5. Linking the EU ETS with CDM and JI – key issues
5.1. When to link?
5.2. How to link?
5.3. What projects to link with?
5.4. How much to link?
5.5. Double counting and JI in accession countries
6. Conclusion

Chapter 6 Economic analysis of emission trading in CO emissions in the European Union

1. Introduction

PART I Economic analysis for the Green Paper and Commission Proposal for the EU ETS Directive

2. Emissions trading in the pre-enlargement European Union
3. Methodology
4. Caveats
5. The result
5.1. The baseline case
5.2. The reference case
5.3. The economic effects EU-wide emission trading to EU Member States
5.4. Additional benefit of emissions trading: What if the countries do not start from an equilibrium?
5.5. Economic Analysis of the Commission Proposal for the EU ETS directive

Part II Economic analysis for the Commission Proposal for the Linking Directive

6. Extending the analysis to EU enlargement and linking of JI and CDM credits to the EU ETS
7. Methodology
8. Caveats
9. The results
9.1. The baseline case
9.2. The economic effects of enlargement to the EU-
9.3. The economic effects of allowing JI and CDM credits (“Linking”)
9.3.1. Sensitivity analysis Only EU ETS participants purchasing JI and CDM credits EU ETS participants and other countries/companies purchasing JI and CDM credits

Part III The first year of the EU ETS

10. The development of the allowance market in
11. Summary of the results

Chapter 7 The first allocation round: a brief history

1. Introduction
2. Environmental added-value
3. Article
4. Allocation methodologies
5. Auctioning
6. Allocation for free
7. Historical emissions basis
8. Benchmarks
9. Transfers and closures
10. New entrants
11. Newer and not so new entrants
12. The legislative context
13. The Commission's role
14. Assessing national plans
15. The pathfinders
16. The United Kingdom
17. Germany
18. France
19. Italy
20. Poland
21. Other Member States
22. Conclusion

Chapter 8 An introduction to the monitoring and reporting guidelines (Commission Decision 2004/156/EC) and registries regulation (Commission Regulation (EC) No 2216/2004)

1. Introduction
2. The Registries Regulation
2.1. Interaction between the Kyoto Protocol and the EU scheme
2.2. Overarching structure of the UN and EU registries systems
2.3. Communications between and within the registries systems
2.4. Structure of an EU registry
2.5. Explaining the different transaction types
2.5.1. Allocation (Articles 38 to 48)
2.5.2. External transfers (Articles 49 to 50) and voluntary cancellation (Article 62)
2.5.3. Surrender (Article 52)
2.5.4. Use of CERs and ERUs and cancellation and retirement (Articles 53, 58 and 59)
2.6. Status and publication of information contained in the registries systems
3. The Monitoring and Reporting Guidelines
3.1. Coverage of the guidelines
3.2. Establishing a monitoring methodology under an emissions permit
3.3. The verification process
3.4. Treatment of biomass and carbon capture and storage
3.5. Forthcoming revision of the guidelines
4. Conclusions

Chapter 9 The potential role of the EU ETS for the development of long-term international climate policies

1. Introduction
2. Kyoto's unfinished business - The challenges ahead of us
3. Opportunities until 2030: Making a leap forward towards climate-friendly and wealthy societies
3.1. Technological opportunities
3.2. Economic affordability
3.3. Investment opportunities in the energy sector
3.3.1. Investing in a clean energy sector
3.3.2. What can development finance contribute?
3.3.3. How much carbon finance will Kyoto mobilise?
3.3.4. Bridging the finance gap
4. The road from Kyoto via Marrakech to Montreal
5. Moving ahead on multiple tracks: the upcoming international negotiations
6. Making the EU ETS fit for the future
6.1. Informing the international negotiation process
6.2. Gradually expanding the internal carbon market until 20
6.3. The emerging global carbon market until
6.4. Opening the EU ETS further after


Appendix 1 Green Paper on greenhouse gas trading within the European Union

Appendix 2 Directive 2003/87/EC of the European Parliament and of the Council of October 2003, establishing a scheme for greenhouse gasemission allowance trading within the Community and amending Council Directive 96/61/EC

Appendix 3 Consolidated text of Directive 2003/87/EC

Appendix 4 Directive 2004/101/EC of the European Parliament and of the Council of October 2004, amending Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, in respect of the Kyoto Protocol's project mechanisms

Appendix 5 Implementing provisions and reports

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