Emission monitoring : EC to include carbon leakage measures in the revised EU ETS Directive

A legislative proposal on the revision of Directive 2003/87/EC of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community (EU ETS Directive) will be prepared in 2015. The revision would also include carbon leakage measures. This news was announced by the European Commission (EC) on 5th March 2015, at the occasion of an answer to a  parliamentary question.

Assign allowances to exposed sector to reduce risk of carbon leakage

Carbon leakage represents an increase of greenhouse gas emissions in third countries where the industry in question is not subject to similar restrictions on carbon emissions. To address the risk of carbon leakage, the EU ETS Directive provides that the EU assigns free allowances to sectors or sub-sectors exposed to a significant risk of carbon leakage.

Greenhouse gases (GHGs) monitoring : reminder on free emission allowances of GHGs

  • As a reminder, Five judgments of the General Court of 26 September 2014 (Cases T-614/13, T-629/13, T-630/13, T-631/13 and T-634/13) were announced in the OJEU C 395 of 10 November 2014. The General Court indicates in its judgments that the Member States cannot allocate additional free emission allowances of greenhouse gases (GHGs) in order to protect national industries in economic difficulty.
  • Thus, the General Court considers that this would negatively impact the competition between industries in different Member States. In addition, it recalls that such exceptions cannot be foreseen in view of the overall objective of reducing greenhouse gas emissions.
  • In addition, the General Court recalls that when a facility performs several activities eligible for free allowances, the allowances are allocated for each activity and are not cumulative.

 Red-on-line EHS Legal specialist