Climate Action

Commission rules on temporary free allowances for power plants in Poland

Power plant with smokestack pollution © iStockphoto

The European Commission today approved Poland's request for a continued free allocation of EU Emissions Trading System (EU ETS) allowances to its power sector beyond this year, subject to certain modifications being made. The Commission has taken its decision under provisions which allow certain Member States exemptions from the general rule that, from 2013 onwards, the power sector must buy all its allowances at auctions or in the market.

The modifications Poland is required to make relate to installations which otherwise may not receive free allowances and to some technical aspects of the allocation methodology used. The modifications need to be notified by end 2012 and the Commission will work with Poland to implement them.

The Commission's decision also stipulates that certain investments proposed by Poland, primarily concerning new coal-based generation capacity, may not be used to justify the allocation of free allowances. Poland plans to grant free allowances to installations only after admissible modernisation investments have been realised.