Climate Action

Emissions Trading System: Rules on transitional free allocation of allowances to the power sector ad...

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From the start of the third phase of the EU Emissions Trading System (2013-20) the power sector will in general have to buy all its allowances. However, until 2019 ten Member States may choose to allocate a limited number of allowances for free to power stations instead of selling them. Today's Commission Decision sets out the rules Member States would have to follow if they opt to give away allowances for free, and is accompanied by a Communication with additional guidance on how any applications received will be assessed.

The Decision lays down the rules for allocating free emission allowances to eligible power installations. It was approved unanimously by Member States at the November 2010 meeting of the EU Climate Change Committee, in which all Member States are represented, and was formally adopted by the Commission today.

The Communication sets out the elements that the Commission has to assess when receiving an application for free allocation to the power sector. It also provides clarification on different elements of the legal provisions.