‘CO2 Emission Factor’, in tCO2/MWh, means the weighted average of the CO2 intensity of electricity produced from fossil fuels in different geographic areas.
The weight shall reflect the production mix of the fossil fuels in the given geographic area.
The CO2 factor is the result of the division of the CO2 equivalent emission data of the energy industry divided by the Gross electricity generation based on fossil fuels in TWh.
For the purposes of Guidelines, the areas are defined as geographic zones
(a) which consist of submarkets coupled through power exchanges, or
(b) within which no declared congestion exists and, in both cases, hourly day-ahead power exchange prices within the zones showing price divergence in Euro (using daily ECB exchange rates) of maximum 1% in significant number of all hours in a year.
Such regional differentiation reflects the significance of fossil fuel plants for the final price set on the wholesale market and their role as marginal plants in the merit order.
The mere fact that electricity is traded between two Member States does not automatically mean that they constitute a supranational region.
Given the lack of relevant data at sub-national level, the geographic areas comprise the entire territory of one or more Member States. On this basis, the following geographic areas can be identified: Nordic (Denmark, Sweden, Finland and Norway), Central-West Europe (Austria, Belgium, Luxembourg, France, Germany and Netherlands), Iberia (Portugal, Spain), Czech and Slovakia (Czech Republic and Slovakia) and all other Member States separately.
The corresponding maximum regional CO2 factors are listed in Annex IV to the Guidelines (see them in the attachment).
The source of the definition - European Commission Communication on Guidelines on Certain State Aid Measures in the Context of the Greenhouse Gas Emission Allowance Trading Scheme Post 2012 C(2012) 3230 final {SWD(2012) 130 final} {SWD(2012) 131 final} of 22 May 2012.