The European Commission today authorised requests from Cyprus, Estonia and Lithuania for a continued free allocation of EU Emissions Trading System (EU ETS) allowances to their power sectors beyond this year. The Commission has taken these decisions under provisions which allow certain Member States exemptions from the general rule that, from 2013 onwards, the power sector must buy all its emission allowances at auctions or in the market.
In total, close to 35 million allowances will to be allocated for free to power plants in these three countries in the period 2013 to 2019. The number will be reduced each year, reaching zero in 2020. The three Member States will put in place strict monitoring and enforcement rules to ensure that the economic value of free allowances is at least mirrored, if not exceeded, by a corresponding amount of investment in modernising their electricity generation.