The admissibility of changing individual allocations – enforceability and closure rules
- Category: Implementation
To put it briefly - in that regard the diversity isn’t desirable.
EUA/CER spread tendency and the legal framework for CER’s after 2012
- Category: Emissions trading
Despite an extensive variety of provisions relating to the status of CER units in the post-2012 legal framework of the Directive 2009/29/EC (aiming generally at securing stability of the long-term green investments), at least one of these provisions should be of particular concern to the CER buyers and investors.
Recent differentiation in VAT treatment of emissions transactions and the IETA master agreement
- Category: IETA Agreements - Commentary
Taking into account that ETMA’s last version (3.0) was designed in 2008, the question may arise whether the text of the master agreement shows the required elasticity, to cover the multiplicity of approaches taken recently in the matter of VAT taxation of EUAs, CERs and ERUs trading. Let’s remind that they are ranging from exemption from VAT and zero rate, through “reverse charge” to standard rate.
Transfer of allocated EUAs within the same group of companies – the problem persists
- Category: Implementation
It is a common practice that, in the course of restructuring, the groups of undertakings are closing non-effective installations and transfer the production to the most effective ones. Such an objective lies often at the origin of mergers and acquisitions in the capital market.
Taking into account the legal scheme of the EU ETS there are arguments that the abovementioned practice should be reflected in rules relating to installations that entirely or partially ceased to operate or significantly reduced their capacity, on the one hand, and the new entrant reserve on the other. But the aforementioned mutual legal dependencies unfortunately are not included in the text of the Directive 2003/87/EC.
The problem appeared already in the case law. The issue is now – but only as regards the third trading period - in the hands of the European Commission which is obliged by the Directive to adopt by 31 December 2010 legal measures provided for in the Articles 10a(7) and 10a(20) of the Directive.
New primary market for emissions allowances – some remarks on auctioned products
- Category: Auctions of CO2 allowances
In spite of mysteriously drafted provisions of Article (4(2) and 4(3) of the Auctioning Regulation, beneath I try to determine the concrete time span for auctions of futures and forwards in relation to EUAs of the third trading period, as well as the available volumes of such contracts.
Bidding strategies in future auctions of EUAs
- Category: Auctions of CO2 allowances
The rules on the random resolution of “tied bids” and on the application of a uniform clearing price, foreseen in the Commission proposal for the Regulation on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/EC of the European Parliament and the Council establishing a scheme for greenhouse gas emission allowances trading within the Community (version of 6 April 2010) will for sure be of utmost attention of the future auction participants.
According to the Impact Assessment, amongst the arguments for the eventual model in that regard was the intention to facilitate access to auction for small and medium-sized enterprises (SMEs).
But the aforementioned principles will take effect in bidding strategies of all bidders.