Consultation paper New State aid Guidelines in the context of the amended EU Emissions Trading Scheme - emission factor most important?
- Category: Implementation
The CO2 emission factor corresponds to the CO2 emissions per MWh of electricity generated and the questionnaire prepared by the Commission raises the issue what CO2 factor to use as a basis for calculating the compensation for costs relating to greenhouse gas emissions passed on in electricity prices. The Directive 2003/87/EC didn’t precisely specify this issue and the said question is now at the centre of discussion. The outcome of the debate may impact on the competitiveness of the whole industries.
Guidance on the optional application of Article 10c beset with legal traps (II)
- Category: Implementation
Designing the legal mechanism to account for the relevant transfers of funds is an ultimate ambush.
What would be the legal form (what kind of agreement, sale, donation, other) of the purported transfers between companies taking part in the operations for the transfer of funds, how these operations would be accounted for, what form of taxation to apply (as regards VAT, CIT), and what would be the effects of these processes on the profits of the company – all these matters require analysis.
Guidance on the optional application of Article 10c beset with legal traps (I)
- Category: Implementation
If somebody hoped so far that submitting national plan for investments, pursuant to Article 10c(5) of Directive 2003/87/EC, would in any way resolve the question of state aid, he should now, after publication of the guidelines, have no illusions about it.
Guidance on the optional application of Article 10c – the notion of “physically initiated” investment once more in focus
- Category: Implementation
“Preparatory work” concept casts numerous doubts. Will current legislative efforts at national level manage the situation to be cleared up?
The volumes of early auctions specified but the method and detailed timelines for monetisation of phase 3 allowances from NER 300 still uncertain
- Category: Emissions trading
According to the European Investment Bank all sales of CO2 allowances from the new entrant reserve (NER300) will be of a forward nature for settlement in December 2013 at the earliest. The options for the monetisation method are: auctions, on an exchange and over the counter.
It follows from the Cooperation Agreement between European Commission and the European Investment Bank on the implementation of Commission Decision C(2010) 7499 that the main elements of the monetisation method including the defined monetisation period and the expected total volume of monetisation should be published on the EIB's website but it has not been done yet.
This publication is impatiently awaited because there are some ambiguities as regards important for EUETS participants features of monetisation.
ICE Futures Europe Circular 11/038 of 10 March 2011 – safeguarding the position of the Exchange but what about the traders?
- Category: Emissions trading
Does the ICE Futures Europe Circular 11/038 of 10 March 2011 mean that the trader that was delivered by the Clearing House and the Exchange “prohibited” emission allowances has no legal remedies against the seller? Such a rule would be difficult to accept from the position of legal interests of the buyer as a party to the agreement. It seems that in the said document there are also other points that should be carefully considered.
Delivery delay mechanism in EU ETS registries – something like the RGGI design?
- Category: Emissions trading
Under Regional Greenhouse Gas Initiative Model Rules the Regulatory Agency of the RGGI (or its agent) records a CO2 allowance transfer by moving each CO2 allowance from the transferor account to the transferee account within 5 business days of receiving a CO2 allowance transfer.
Is this a right remedy for the EUETS recent weaknesses?
Enforcement of the surrender obligation and companies affiliations – something missing?
- Category: Emissions trading
It should be considered that the responsibility for the timely surrendering of emission allowances be accounted for at a level of a group of affiliated companies.
Californian v European model for emission allowances auctions – which of them is better suited to the market
- Category: Auctions of CO2 allowances
Auctions are the pivotal element of the primary market for emissions allowances in the Californian cap-and-trade as well as EUETS. The Auctioning Regulation present in the EUETS (No 1031/2010 of 12 November 2010) seems generally more detailed than the Regulation Order proposed by Air Resources Board. Contrary to the ARB proposal it specifies for instance such details as consequences of late or non-payment etc.
There are many similarities in the auction design and also some differences of technical nature. But several economical and legal assumptions and measures are original in the Californian model for auctions.
Knowledge sharing under NER300 Decision - how to retain the knowledge for yourself (II)
- Category: CCS
It should be stressed that the category of Foreground and, consequently, the requirement of knowledge sharing - comprises the property of the Project Sponsor or every relevant consortium member, supplier or sub-contractor who developed it. All these complex issues need therefore to be carefully considered and precisely specified in all contracts governing the project applying for NER 300 funds.
Knowledge sharing under NER300 Decision - how to retain the knowledge for yourself (I)
- Category: CCS
Licensing requirements in the “Specifications of the Legally Binding Instrument” seem to be a little bit ambiguous. The said provisions should be interpreted separately as regards each of the categories “Relevant Knowledge”, “Foreground” and “Background”. For information defined as “Background” the issue seems to be clear – it is not subject to the knowledge sharing requirements. But the other two categories deserve to be given due consideration.
The Cost Containment Mechanisms in the California Cap-and-Trade Program – why absent in the EUETS?
- Category: Emissions trading
In the European cap-and-trade the cap is established on the volume of allowances and, unfortunately, not on the price. But as the experience shows there are interesting concepts, how to mitigate not only the impact of climate change, but also the price risks inherent in the scheme. Direct quarterly sales of allowances from the Allowance Price Containment Reserve and the fixed Auction Reserve Price cause (providing that the Reserve won’t be prematurely exhausted) that in the California cap-and-trade the regulatory-fixed price range from 10$ to 75$ per metric ton of CO2 can be specified in the perspective 2012 – 2020 (with appropriate modifications in each year of the period).