4. Member States shall calculate the preliminary annual number of emission allowances allocated free of charge as of the start of normal operation of the installation for each sub-installation separately, and for each heat benchmark sub-installation the preliminary annual number of emission allowances allocated free of charge shall correspond to the value of the heat benchmark for this measurable heat as referred to in Annex I to the Decision (i.e. 62.3 allowances/TJ) multiplied by the heat-related activity level (Article 19(1)(b) of the Commission’s Decision).

 

5. Member States shall notify to the Commission without delay the preliminary total annual amount of emission allowances allocated free of charge. Emission allowances from the new entrants reserve created pursuant to Article 10a(7) of Directive 2003/87/EC shall be allocated on a first come, first served basis with regard to the receipt of this notification (Article 19(4) first sub-paragraph of the Commission’s Decision). So, taking into account that the number of allowances in the new entrants reserve is limited, the potential investors may be late. If it occurred, the installation being new entrant wouldn’t get free allowances and the profit and loss account of the installation at issue would be additionally burdened. At present it is very difficult to predict whether the new entrant reserve will be exhausted and if so, when.

 

Moreover, Article 19(6) of the Decision makes the reservation that, ‘When half of the amount of allowances set aside for new entrants pursuant to Article 10a(7) of Directive 2003/87/EC, notwithstanding the amount of allowances available pursuant to Article 10a(8) of Directive 2003/87/EC, is issued or to be issued until 2020 to new entrants, the Commission shall assess whether a queuing system should be put in place to ensure that access to the reserve is managed in a fair way.’ Considering the literal wording of this paragraph it is worth to be noted that the potential investors not know, when a queuing system exactly will be applied, because this provision imposes on the Commission the obligation only ‘to assess’ such a need. The interested parties have therefore no legal certainty in that regard and need  to valuate in their projections the risks stemming from this fact.

 

6. The Commission may reject the preliminary total annual amount of emission allowances allocated free of charge for the installation concerned (Article 19(4) second sub-paragraph of the Commission’s Decision). The Decision is not precise, however, on what grounds the Commission may reject the said preliminary amount submitted by the Member State. This discretionary element in the procedure for the allocation of free emission allowances for new entrants involves unnecessary investment risk. How to imagine on what grounds the Commission may reject the preliminary amount of emission allowances in respect of particular installation? The only thing could be certain if such an occurrence materialises – the eventual court proceedings will last long (take as a reference the current legal dispute regarding Estonia second NAP).

 

Cookies

We use cookies on our website to support technical features that enhance your user experience and help us improve our website. By continuing to use this website you accept our Privacy Policy.