EC tells Germany to change national emissions law

Brussels (Platts)--7Jul2004

The European Commission has told Germany it must change its national emissions
law for its national allocation plan for emissions to be accepted, EU
environment commissioner Margot Wallstrom told journalists in Brussels
Wednesday. 

Wallstrom said the EC's biggest concern with Germany's NAP was that
it allowed ex-post adjustments of emission allowances allocations, that is,
changes after the initial allocations had been made. The EC is concerned that
ex-post adjustments would create uncertainty for business and hamper trading.
"Germany will have to change its national law" to remove ex-post adjustments,
Wallstrom said, adding that Germany clearly understood and accepted this.
Germany has until the end of 2005 to make these technical changes, as the EC
recognizes that Germany needs time to change its law. The European Union
emissions trading scheme starts on Jan 1, 2005. Germany's NAP covers 2,419
installations and allocates 1497-mil mt CO2 during 2005-2007, the first period
of the EU ETS.

Germany's original NAP allowed it to make ex-post adjustments to allocations
to installations during the 2005-2007 trading period, to make up for potential
differences between the situation on which the allocations were based and the
actual situation during the trading period. It also allowed Germany to adjust
installations' allocations where their annual emissions during 2005-2007 are
lower than 40% of the base period emissions.

Germany's NAP also allowed it to
consider changing the initial bonus allowances allocated to combined heat and
power units based on how much power was actually produced using CHP as opposed
to conventionally. And the German NAP allowed ex-post adjustment of allowances
to new entrants, which the EC said would discriminate against them. Germany
has agreed to make these technical changes to remove ex-post adjustments, and
the EC said such a revised NAP would be automatically acceptable, without
needing further assessment.

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