Category: Implementation


It is possible that a non-ETS heat consumer becomes an ETS heat consumer and vice versa. The legal effects for such changes are specified in the guidance document.

 

The one of the fundamental rules as regards free allocation of emission permits for the heating sector in the period from 2013 to 2020 with respect to cross-boundary heat flows under the European Commission’s Decision of 27 April 2011 and the Guidance Documents n°6 on the harmonized free allocation methodology for the EU-ETS post 2012, Cross-Boundary Heat Flows, Final version issued on 14 April 2011
(http://ec.europa.eu/clima/documentation/ets/docs/benchmarking/gd6_
cross_boundary_heat_flows_en.pdf) is that:

1) allocation is given to ETS heat consumers unless heat is imported from non-ETS heat producers,

2) allocation is given to ETS heat producers if consumers are not covered by the ETS.

 

Another Guidance document - Question&Answers on the harmonised free allocation methodology for the EU-ETS post 2012 of 9 November 2011 (http://ec.europa.eu/clima/documentation/
ets/benchmarking_en.htm) in point 2.6 specifies in further detail this important rule, especially answers the question how does the allocation for a heat producer change when its consumers enter or leave the scope of ETS during the baseline period.

 

The said Q&A document confirms that following the rules for cross-boundary heat flows in Guidance Document 6, a heat producer only receives allocation for net heat flows it produces for non-ETS consumers.

A non-ETS heat consumer may, however, become an ETS heat consumer and vice versa. It should be recalled that this can have an effect in the allocation of the heat producer.

 

The specific clarifications given in the said Q&A document as regards this situation are as follows:

 

1. when a non-ETS consumer enters the scope of ETS, the activity level of the heat benchmark subinstallation that covers the heat export to non-ETS consumers will decrease;

 

2. when an ETS consumer falls outside the scope of the ETS, the activity level of the heat benchmark sub-installation that covers the heat export to non-ETS consumers will increase;

 

3. if the change occurred during the baseline period, this influences the historical activity level;

 

4. a non-ETS consumer entering the ETS scope can never lead to a significant capacity reduction at the heat producer side as physical changes outside the ETS can never give rise to a significant capacity changes;

 


 

5. when an ETS consumer falls out of the scope of ETS, the heat producer could have a significant increase in capacity during or after the baseline period only as a result of a physical change, if any (see section 6.4 of Guidance Document 2 for capacity changes before 30 June 2011 (http://ec.europa.eu/clima/documentation/
ets/docs/benchmarking/gd2_allocation_methodologies_en.pdf).

 

According to the annotation on the said Q&A document, it has been developed building on the frequently asked questions to the Helpdesk for the Member States Competent Authorities which is driven by a consortium of the European Commission’s consultants, does not represent an official position of the Commission and is not legally binding. It is thus really disappointing that documents representing such important provisions heavily influencing the legal position of economic entities are made in this way.

It is a common opinion that the Directive 2003/87/EC have become now only a general master legal framework but the concrete provisions shaping the entrepreneurs’ rights and obligations in that regard are delegated to much lower ranking provisions. There is a lesser problem, when these provisions are the European Commission’s regulations and decisions, but currently with respect to the climate change law we face the complete flood of guidelines prepared for the European Commission by external consultants. These guidelines dealing with concrete cases sometimes go far beyond the original legal provisions.