European Environment Agency (EEA)

Application of the Emissions Trading Directive by EU Member States


Courtesy of Courtesy of European Environment Agency (EEA)

Member States shall report annually on the application of the Emissions Trading Directive, according to Article 21 of the Directive. The reporting obligation will allow the Commission to continuously follow the implementation of the Directive and provide information for the Commission's review report (under Article 30 of the Directive). This is particularly important for the first set of reports.

A questionnaire was developed and provided to the Member States in 2005. Responses were sent to the European Commission and copies forwarded to the EEA. The EEA and its European Topic Centre on Air and Climate Change (ETC/ACC) assessed the responses and this assessment is presented in the report.

The first reports were due by 30 June 2005 and should cover the period up to 30 April 2005. This report includes the replies to the questionnaire from 24 Member States (Note: Cyprus has not submitted any report). Where Member States delivered their reports late, the situation described in the report is assumed to reflect only the period up to 30 April 2005. For the sake of clarity, all reports from Member States are assumed to refer to this period irrespective of whether they cover a somewhat longer period or not. In any case, it should be borne in mind that the situation in Member States may have changed since the reports were submitted.

The assessment of this first set of Article 21 reports gives an initial comprehensive overview of how Member States have implemented the Emissions Trading Directive. It also covers their approaches to the different administrative procedures which are necessary for running the Emissions Trading Scheme. Both similarities and differences in implementation are identified. This report may therefore support Member States in improving their future application of the Emissions Trading Directive by making them aware of the approaches chosen by other Member States. The main findings which can be derived from the assessment of the reports are summarised below.

Competent authority

In most Member States more than one competent authority is involved in the national implementation of the Emissions Trading Scheme. Issuance of greenhouse gas permits and monitoring of emissions are in some countries carried out by regional or local authorities. The choice may depend on the size and the general institutional structure of the Member States. Since there are links between the different procedures, it is important to ensure avoidance of inconsistencies at national implementation level. Several Member States report measures to avoid such problems, for example through working groups with regular meetings, the development of specific guidance notes and the establishment of an 'interpretation group' or training courses for employees of the competent authorities.

Coverage of activities and installations

The number of installations and the amount of emissions covered under the Emissions Trading Directive will change continuously during a trading period due to new entrants or closures of installations. The size of the entire Emissions Trading Scheme (EU ETS) will therefore vary, albeit only slightly. A total of 10  078 installations have been reported by 23 Member States. Installations in Poland, with more than 1 000 installations, are not included. One-third of the combustion installations covered by the scheme have a rated thermal input between 20 and 50 Megawatt (MW). These installations are covered by the EU ETS but only partly by the IPPC Directive. They account for 2 % of the overall emissions reported so far. Installations with emissions of more than 500 000 tonnes of CO2 per year account for 7 % of the total number of installations, but are responsible for more than three quarters of total emissions. Small installations with 10 000 tonnes of CO2 emissions or less per year account for more than one-third of the installations, but for less than 1 % of the total emissions. Only 21  applications to form a pool have been received from operators in six Member States, indicating that this provision has not been widely used so far.

Permits for installations

Member States apply different measures to ensure operator compliance with the requirements of their permits. Some Member States report that random spot checks will take place at the installations. In the Netherlands, the competent authority will visit one-third of the installations on a regular basis for each year of the trading period. In several Member States more than one competent authority is involved in issuing permits of installations. This may cause inconsistencies in the national implementation if the individual competent authorities interpret the national legislation differently. Several Member States report measures to avoid such problems, for example through working groups with regular meetings, the development of specific guidance notes, the establishment of an 'interpretation group' or training courses for employees of the competent authorities. With regard to changes in the installations, the Netherlands has developed seven categories for different types of changes. The United Kingdom has established a similar categorisation which, however, has not been applied by all their competent authorities. The use of different criteria for categorising changes may confuse operators with installations in several Member States.

Application of 'Monitoring and Reporting Guidelines'

Only limited information was available on the application of the Monitoring and Reporting Guidelines during this first reporting period. However, it is already clear that there are differences in the application of the guidelines. Several Member States have included provisions for lower tiers in their national law for certain activities. In other cases minimum tiers are not (yet) technically feasible. Data was provided by ten Member States on monitoring methods of installations with annual emissions over 500 000 tonnes. These data indicate that in around 20 % of installations the activity data, the emission factor or the net calorific value is not determined in accordance with the minimum tier requirements for at least one fuel. The data submitted do not include the quantity of the affected fuel flows and at this stage no conclusions can be drawn on the impact of these deviations from the guidelines on the overall quality of the emission data. The absence of a strict application of the 'Monitoring and Reporting Guidelines' might lead to unequal treatment of installations across the European Union.

Arrangements for verification

At the time of reporting, preparations for verification were in their preliminary stages in many Member States. General aspects such as the possibility for accreditation of independent verifiers, according to national rules, are treated similarly in almost all countries. However, there are issues reported by some Member States which could be considered by the other Member States as well. In two countries verifiers have to provide recommendations for improving the monitoring plan of an installation as part of the verification procedure. In eight Member States verified emission reports may be subject to additional checks by the competent authorities in order to ensure the quality of the verification process. The treatment of verifiers already accredited in another Member State varies considerably. This might reduce the pool of accredited verifiers available to operators.

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