The European Commission has issued a paper giving EU states guidance on how they should allocate CO2 pollution credits to industry under the upcoming second round of the Emissions Trading Scheme for the period 2008-2012.
The Commission is keen to point out that the years 2008-2012 will be decisive as it coincides with the five-year period in which the EU and the member states must meet their target for curbing greenhouse gas emissions under the Kyoto Protocol on climate change.
Brussels said its intention is to lower overall EU emissions by 6% compared to the first trading period (2005-2007). Allocations to member states that are off-track from their Kyoto target will be further tightened compared to 2005-2007, the Commission indicated. Furthermore, an additional criterion that did not apply in the first period requires member states to specify a maximum amount of pollution credits that they wish to allocate under the Kyoto 'flexible mechanism' to promote emissions-saving projects in non-EU countries (Clean Development Mechanism or CDM for short and Joint Implementation or JI).
Member states are to submit their National Allocation Plans (NAPs) by 30 June 2006. Deadline for Commission approval is set for the end of 2006.
