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Alliance of Energy Intensive Industries publishes position papers on ETS issues

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A Position Paper of the Alliance of Energy Intensive Industries covering the treatment of new entrants to the EU ETSi was published in June. The European Commission is considering severely restricting access to the New Entrants’ Reserve (NER) within the EU ETS scheme post 2012 by applying a high threshold for access to the NER and restricting the allocation of allowances from the NER to installations explicitly mentioned in Annex I of the EU ETS Directive.

The Position Paper states that while growth of efficient manufacturing businesses in the EU should be supported, such rules would significantly disadvantage and discourage growing companies and productions. “Such clear signal on a no-growth policy would weaken the position of the Community in the international negotiations and is not in line with the Commission Communication ‘Europe 2020’”, says the Alliance. The Alliance wants to see fair access to the NER with equal treatment between incumbents and new entrants and without undue discrimination of activities not explicitly mentioned in Annex I.

A second Position Paper on the calculation of the maximum amount of allowances for free allocation has also been published by the Alliance. The paper states that the basis for free allocation should include the emissions from the following installations which will receive allowances according to performance benchmarks:

  • emissions stemming from electricity production from unavoidable waste gases;
  • emissions from the production of heat and cooling in high efficiency cogeneration installation (CHP);
  • emissions from new activities including N2O emissions in certain Member States, which will be included in the EU ETS as of 2013 onwards.

If these emissions are not taken into account correctly, the maximum amount of allowances available for industry and therefore potentially for free allocation will be smaller than justifiable, says the Alliance.

Concern that the EU’s Emissions Trading Scheme (EU ETS) appears not to be promoting Combined Heat and Power (CHP) were also expressed at the first joint Euroheat & Power and Cogen Europe conference. The European Commission, however, has defended the EU’s support framework for the heat and power sector, saying that, given its local nature, heat was best addressed at national level, not EU.

Position papers of the Alliance of Energy Intensive Industries in pdf:

Treatment of New Entrants: No auctioning for growth but equal treatment of new entrants and incumbents - 10 June 2010

Calculation of the maximum amount of allowances for free allocation (Article 10a.5, Emissions Trading Directive) - 8 June 2010