CCS Directive – government proposals for implementation in Poland
- Category: CCS
According to the proposals that are published at the website of the Polish Ministry of the Environment, the legal framework for the activities relating to carbon capture and storage in Poland will be designed by the amendment of the existing Geologic and Mining Law.
The proposal unfortunately does not reveal particulars relating to the form and extent of the required financial security, which are the matters of utmost attention for the bankers, lawyers and insurers interested in CCS.
EUAs traded on the spot market considered financial instruments (in Romania)
- Category: taxation issues
EU-wide exemption of the supply of emission allowances from VAT while allowing for deduction of related costs is extremely needed for the cohesion of the carbon market.
Banking of EUA’s – is the Directive 2003/87/EC properly implemented?
- Category: Emissions trading
Someone wishing to bank emission allowances from second to third trading period can be surprised by the relevant provisions of some national laws of the Member States.
Take for instance the Articles 28 and 29 of the Polish bill on the GHG and other substances emission allowances trading.
The authorization for brokers dealing in CO2 spot markets?
- Category: Emissions trading
The MIFID Directive does not regulate, in general, the legal requirements for spot markets in CO2 emissions allowances. The legal base for such a view is the Article 38 of the Commission Regulation No 1287/2006 of 10 August 2006 (subject to conditions described in detail in the said provision).
On the other hand, taking into account the economic side of the issue, it is often pointed out, that spot trading of EUA, CER and ERU serves, in principle, commercial purposes (and not the speculative ones).
So, in general, in most cases, the commodities spot markets have different, in relation to markets in financial instruments, national legal schemes.
It applies also to Poland, where the Commodity Exchanges Act of 24 October 2000 sets particular requirements as regards CO2 brokers wishing to trade in spot CO2 markets on the Polish Power Exchange.
The new SO2 i NOx emissions market in Poland – some issues are controversial
- Category: Emissions trading
Poland is preparing a new system of emission trading of sulphur dioxides (SO2) and nitrous oxides (NOx).
According to the draft of the new statute, financial institutions won’t be admitted to the market (as well as traders and brokers).
But why the new law restricts the emissions market also as regards the range of possible types of civil contracts?
Current provisions for VAT treatment of CO2 transfers in the EU
- Category: taxation issues
What is current situation in the European Union as regards VAT taxation of transfers of CO2 allowances? The answer is complex.
It should be noted, that four different approaches are being taken across European Union in that matter now.
In the most of EU countries nothing have changed up to now, in some (like United Kingdom, France and Netherlands) in June and July this year were introduced (unilaterally) new measures (different in each of them) and the European Commission also proposes something new – temporary measure in the VAT Directive.
There is of course also a differentiation in VAT treatment of domestic and cross-border transactions.
 Current provisions for VAT treatment of CO2 transfers in the EU.pdf | [ ] | 89 kB |
Banking and borrowing under EU ETS and Boxer Kerry US draft of the new legislation
- Category: Emissions trading
Both of the above possibilities are admissible in the EU and US schemes.
Additionally, Boxer Kerry provides for an interesting solution: “borrowing with interest”.
EUAs and CERs as a security
- Category: Emissions trading
According to the circular of the ICE Clear Europe published in September 2009, the clearing house extended the list of permitted cover and included Emissions Allowances issued under the EU Emissions Trading Scheme (EUAs) and the Kyoto Protocol (CERs).
Clearing Members may now use Allowances or CERs to satisfy original margin requirements. In order to bring a margin, EUAs or CERs should be deposited with a special account of ICE Clear Europe.
So, this proposition and concept presented by the clearing house bases on fiduciary assignment of allowances. It is probably because the other forms of a hypothecation in relation to CO2 allowances are still questionable.
The landscape after the judgment – prognosis of legal effects and further scenarios
It seems unbelievable, that in the construction of the European Emission Trading Scheme occurred such a glaring and - potentially burdened with severe consequences – error in law.
Let’s analyze possible future legal scenarios, that are evoked with the judgment of the Court of First Instance of 23 September
Why can’t new investments in Polish power generators benefit from derogation laid down in Article 10c of the Directive EU ETS
- Category: Emissions trading
There is a threat, that new investments of Polish power generators can’t benefit from derogation provided for in Article 10c of the Directive 2003/87/WE – contrary to intentions, which were expressed by politicians and negotiators during December 2008 negotiations of climate - energy package.
| Why can’t new investments in Polish power generators benefit from derogation | [Anaysis of Article 10c of the Directive EU ETS] | 68 kB |
Polish emission trading bill – unfortunately with many mistakes
- Category: Emissions trading
Polish national implementation measure – the bill of 22 December 2004 of a greenhouse gas and other substances emission trading addresses contract of sale as an only one, that can be applied in relation to a disposal of emission allowances.
It is a classical mistake of legislators.
First opinions in the European Commission’s consultation on the auctioning
- Category: Legal Alert
We remind, that it is now running the period for submission to the European Commission of opinions and remarks in respect of the future shape of the auctioning system.
Their opinions expressed inter alia the Danish Energy Association and the the Association of the Austrian Electricity Companies.
According to both opinions, a single-round sealed-bid auction is the most appropriate auction format for auctioning EU allowances. In the views of the stakeholders, the most appropriate pricing rule for the auctioning of EU allowances is uniform-pricing.
Rationale for this is the view that such a formula gives a clear price signal for the value of an EUA, thereby increasing predictability. It also ensures that every successful participant pays the same price, meaning that the auction price will be fair and minimises the risk of distorting the secondary market.
Both organisations also consider, that the rule for solving ties in the future Regulation should be pro-rata re-scaling of bids.
The opinions of both stakeholders are also consistent in that there should no reserve price apply.