The allocations for some Polish installations for 2012 will be decreased and set aside for the reserve pursuant to the new draft Law. For additional allowances may count the installations which were subject to change.
Recently ended the public consultations relating to the draft Regulation of the Council of Ministers (version of 26 October 2011) amending the Regulation on the adoption of the National Allocation Plan for the emissions of carbon dioxide under the emissions trading scheme (hereinafter referred to as: the ‘draft Regulation’ - available at http://www.mos.gov.pl/kategoria/4504_uzgodnienia_miedzyresortowe/).
The draft Regulation amends the Polish National Allocation Plan (hereinafter referred to as the ‘NAP’) for the period 2008 – 2012. It is planned to table the draft Regulation to the Government soon and the scheduled date for the entry into force of the new law is the early 2012.
In an Internet communication the Polish Ministry of the Environment asserted that in effect of the change of the NAP the allocations will be adjusted to the real needs of the enterprises.
The prime rule for the modified allocation is decreasing the amount of free allowances for entities which reduced emissions in other way than as effect of modernisation.
The Polish Ministry of the Environment clarified that subject to correction are allocations for 2012 taking into account the level of emissions in 2010. According to the said source the current needs for the emission allowances from the reserve exceeded the present abilities.
The Ministry also stated that the effect of the draft Regulation will be exploiting emission allowances for the real emissions from installations, pursuant to the foundations of the emissions trading scheme, and not for being unjustified and additional advantage arising from the very fact of participating in the scheme.
There are, however, some doubts with respect to legal grounds for such ex post correction of the NAP. When it comes to the details, the legal basis for the draft Regulation is Article 15(4) and the Article 95(1) of the Law of 28 April 2011 on the greenhouse gas emissions trading scheme (Journal of Laws No. 122, item 695, hereinafter referred as the ‘Law on the ETS”)
Pursuant to the said Article 15(4) of the Law on the ETS the Council of the Ministers adopts the NAP in the form of the Regulation, mindful of the necessity for ensuring the equality of the treatment of installations covered by the scheme and listed in the NAP, ensuring the access to emission allowances for new entrants, the necessity for ensuring energy security of the State, as well as the common character of the NAP. Moreover, according to the Article 95(1) of the Law on the ETS, implementing measures issued under the previous provisions are binding for as long as the new implementing acts, issued on the basis of the Law on the ETS will enter into force. Article 95(1) of the Law on the ETS further states that the implementing measures issued under the previous provisions (consequently also the Regulation on NAP for the period 2008-2012) may be amended, pursuant to the above-quoted Article 15(4), where ‘it is justified by the economic reasons and the reasons for the energy security of the State’.
The official reasons for the draft Regulation explain that the said Article 95(1) constitutes a transitional provision making possible the amendment to currently-in-force Regulation of the Council of Ministers of 1 July 2008 adopting of the present NAP (published in the Journal of Laws No. 202, item 1248, referred to as the ‘Regulation on NAP’). The document also mentions that the intention of the amendment to the Polish NAP is to correct the allocations for the emission allowances which, in effect, will cause the covering of the real emissions from installations. Notably, new entrants and installations subject to change will have a chance for allocation of free emission allowances, thus enabling level playing field between them and incumbents.
If there occur legal disputes between the Polish Government and the installations subject to a decrease in allocations, the important matter may potentially be the interpretation of the judgement of the Court of the First Instance (in case T-374/04) the Federal Republic of Germany v the Commission of the European Communities on the admissibility of the ex-post adjustments in NAP’s.
It seems, however, not entering into details, that there are significant differences as regards the factual circumstances in both situations (the current correction of the Polish NAP and the case being subject to the above-mentioned judgment).
Some interesting considerations that may be useful in resolving the present doubts flow also from the judgment of the Court of First Instance of 23 September 2009 in Case T‑183/07 the Republic of Poland against the European Commission.