The draft of the Law on the system of balancing and settlement of sulphur dioxides’ (SO2) and nitrous oxides (NOx) emissions from a large combustion plants scheduled to enter into force as from 1 January 2011 introduces in Poland a trading scheme that can be classified as cap-and-trade system rather than baseline-and-credit.
Obligations stemming from the Directive 2001/80/EC of the European Parliament and of the Council of 23 October 2001 on the limitation of emissions of certain pollutants into the air from large combustion plants (OJ L 309, 27.11.2001, p. 1.) were already implemented into Polish national law, but the problem relates to the emission caps laid down in the Treaty concerning the accession of the Republic of Poland to the European Union.
In the said Treaty were imposed - as regards the conditions of implementation of the LCP Directive – common ceilings for emissions of SO2 i NOx for large combustion plants on the territory of the Republic of Poland over years 2008 – 2010 – 2012.
The scope of the law
The law shall relate to the large combustion plants, i.e. the rated thermal input of which is equal to or greater than 50 MW. For new plants (any combustion plant for which the original construction licence was granted on or after 1 July 1987) the definition of large combustion plants is consistent with the LCP Directive and the source means stack (reffering to the LCP principle that where waste gases could be discharged through a common stack, the combination formed by two or more separate plants are regarded as a single unit).
For existing plants (any combustion plant for which the original construction licence was granted before 1 July 1987) the definition is adopted the source = boiler, because the LCP Directive does not regulate that issue explicitly.
Economic incentives to SO2 and NOX abatement
As was said in the written reasons to the draft law, the purpose of the new act is to introduce legal framework that enables Poland to reach in the perspective of 2015 the ceilings on emissions provided for in the said Treaty, through economic incentives for the operators of large combustion plants.
The balancing scheme for SO2 and NOx will be administered by the National Center for Emissions Balancing and Management (KOBiZE).
The separate settlement periods (phases) are not envisioned, the emissions and production will be balanced ex post on a yearly basis, the first year prescribed for yearly reports of operators will most likely be 2010. The draft of the law provides for establishing national yearly emission ceilings and national yearly balance of:
a) the production of electricity,
b) the production of heat,
c) emissions of sulphur dioxides,
d) emissions of nitrous oxides.
On the basis of the above mentioned national yearly emission ceilings and national yearly balances KOBiZE will be determining yearly emission ceilings index.
The main characteristics of the new trading scheme are:
1) allowances are allocated ex-post depending on the production of the installation in the previous year and the yearly emission ceilings index,
2) the banking between years is allowed,
3) because of ex-post allocation the borrowing is not provided for,
4) allowances are to be surrendered by 15 May each year (number of allowances surrendered should equal to the total emissions of the operator during the preceding calendar year).
The draft of the law does not constitute the implementation of Community law. It only creates a flexible mechanism for large combustion plants enabling them to achieve emission ceilings provided for in the Treaty concerning the accession of the Republic of Poland to the European Union – regardless of abiding by obligatory emission standards set by other provisions of law.