The creative Guidance Document n°6 on the harmonized free allocation methodology for the EU-ETS post 2012 – does the word “predominantly” have legal significance?
Wednesday, 15 June 2011 19:03


The Decision does not use the word “predominantly” in the context of the special allocation procedures for private households and does not contain explicit provisions that would enable the differentiation of factual circumstances with 25 apartments and 2 shops from 25 apartments and 3 shops.

 

 

The special allocation rule for private households were introduced into the benchmark decision in the last stage of the procedure. The purpose of these exceptions to the general allocation rules was to avoid violent increases in the prices of the heat delivered to residential consumers due, in particular, to the application of the natural gas benchmark (not adequate for coal fired installations). Maybe for the reason of the hasty drafting of these provisions, they seem, however, not sufficiently detailed and require very extensive interpretations on the part of the external consultants hired by the European Commission.

 

The Guidance Document n°6 on the harmonized free allocation methodology for the EU-ETS post 2012, Cross-Boundary Heat Flows, Final version issued on 14 April 2011 published on

http://ec.europa.eu/clima/documentation/ets/benchmarking_en.htm) interprets Article 10(3) of the Commission’s Decision determining transitional Union-wide rules for the harmonised free allocation of emission allowances pursuant to Article 10a of Directive 2003/87/EC of 27 April 2011 in a very creative way.

 

It points at certain examples:

- An apartment building with 25 apartments and 2 shops should be regarded as 'predominantly used by individuals for residential purposes' and the heat delivered to this building can be fully considered as delivered to private households.

- An apartment building with 15 apartments and 8 shops with a heat consumption in the same order of magnitude as an apartment should be regarded as 'partly used by individuals for residential purposes' and only the heat delivered to the 15 apartments can be considered as delivered to private households.

Art. 10(3) of the Commission’s Decision determining transitional Union-wide rules for the harmonized free allocation of emission allowances pursuant to Article 10a of Directive 2003/87/EC:
“To the extent that measurable heat is exported to private households and the preliminary annual number of emission allowances determined in accordance with paragraph 2(b), point (i), for 2013 is lower than the median annual historical emissions related to the production of measurable heat exported to private households by that sub-installation in the period from 1 January 2005 to 31 December 2008, the preliminary annual number of emission allowances for 2013 shall be adjusted by the difference. In each of the years 2014 to 2020, the preliminary annual number of emission allowances determined in accordance with paragraph 2(b), point (i), shall be adjusted to the extent that the preliminary annual number of emission allowances for that year is lower than a percentage of the abovementioned median annual historical emissions. This percentage shall be 90% in 2014 and decline by 10 percentage points each subsequent year.”

 

As a matter of fact the Commission’s Decision of 27 April 2011 only defines private households in Article 3(q), in the following manner:

“‘private household’ means a residential unit in which persons make arrangements, individually or in groups, for providing themselves with measurable heat”.

 



 

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