|Guidance on the optional application of Article 10c – the notion of “physically initiated” investment once more in focus|
|Friday, 01 April 2011 19:23|
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“Preparatory work” concept casts numerous doubts. Will current legislative efforts at national level manage the situation to be cleared up?
According to the Communication from the Commission, Guidance document on the optional application of Article 10c of Directive 2003/87/EC (2011/C 99/03, OJ C 99, 31.3.2011, p. 9) an investment process should be considered physically initiated no later than 31 December 2008 if it can be demonstrated that the investment decision was not influenced by the option of receiving free allocation of emission allowances.
The above-stated thesis can be proved, pursuant to the said guidance document, by Member States wishing to make use of free allowances covered by Article 10c of the Directive 2003/87 with four general categories of factual arguments.
First of all Member States could provide substantiated evidence that:
1) construction work has physically started on-site and was visible by 31 December 2008; or
2) a contract for the construction of the power plant in question was signed before 31 December 2008 between an investor (often the operator of the plant) and a
company that is in charge of the construction work.
If the above-mentioned two approaches are not feasible in the concrete factual circumstances the matter becomes more complicated, and requires to have recourse to the concept of “preparatory work” forming third approach. In that regard the Commission in the cited guidance document remarked, ‘The Commission understands that, in the given context, construction work that has physically started could also encompass preparatory work for the construction of the power plant in question, but would always be undertaken on the basis of an explicit approval, if necessary, of the relevant national authority. Member States should submit such relevant authorisation document, which should be of substantive legal status issued in accordance with national or Union law. In the absence of a requirement for an explicit approval for preparatory work, other evidence would be necessary to establish that construction work had been physically started’.
The fourth method of argumentation is extensive and currently unspecified because Commission reserved that ‘The above list should not be considered exhaustive, as Member States may have other means to provide documentary evidence that a certain investment decision was not influenced by the option of receiving free allocation of emission allowances’.
Assuming that the methods 1) and 2) are rather unambiguous and the fourth approach is an open matter to be only conceived, it would be reasonable to go further into particulars of “preparatory work” concept.