Navigation path
Page navigation
- Climate change in brief
- Climate and energy package
- Roadmap 2050
- European Climate Change Programme
- Greenhouse gas Monitoring & Reporting
- Emissions Trading System
- Effort Sharing Decision
- Low Carbon Technologies
- Transport
- Ozone Layer Protection
- Fluorinated Gases
- Forests and Agriculture
- Adaptation to climate change
- Climate finance
- Working with International Partners
Additional tools
As from 2013, auctioning will be the default method of allocating emission allowances in the EU Emissions Trading System. In particular, power generators will no longer receive free allowances but would need to buy them. The only exception to this rule applicable to the power sector is laid down in Article 10c of the revised EU ETS Directive, which provides for the option of allocating a limited number of free allowances to power generators for a transitional period.
This option is available to 10 Member States: Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland and Romania. In order to obtain such a derogation, they have to submit an application to the European Commission by 30 September 2011. The Commission may reject the application or parts thereof within 6 months.
Derogation limited in terms of time, scope and quantity
The derogation is limited in terms of:
- Time: from 2020 at the latest there must be no more free allocation of allowances to the power sector
- Scope: only installations that started to generate electricity before 31 December 2008 or for which the investment process was "physically initiated" by that date are eligible to receive free allowances under the derogation; and
- Quantity: the Directive determines a maximum quantity of free allowances that can be granted in 2013, and this gradually has to decline in subsequent years to reach zero in 2020.
The Directive requires installations benefitting from free allocation under the derogation to invest in projects designed to modernise electricity generation in the Member State concerned. The value of the investments should mirror the value of the free allocation.
"Derogation package" adopted on 29 March
On 29 March 2011, the Commission adopted the so-called "derogation package" which consists of
- a Commission decision setting how to allocate free allowances to eligible installations under the derogation; and
- a Communication from the Commission on how it will assess all issues relevant for the application.