Głowacki Law Firm

Exclusion of small installations and hospitals from EU ETS – time for conclusive decisions - Page 2
Tuesday, 21 June 2011 20:56


Units below 3 MW thermal input and units using exclusively biomass

 

The issue relating to the units below 3 MW thermal input is triggered off by the content of the clause 3 of Annex I to the Directive.

Clause 3 of Annex I to the Directive 2003/87/EC

“When the total rated thermal input of an installation is calculated in order to decide upon its inclusion in the Community scheme, the rated thermal inputs of all technical units which are part of it, in which fuels are combusted within the installation, are added together. These units could include all types of boilers, burners, turbines, heaters, furnaces, incinerators, calciners, kilns, ovens, dryers, engines, fuel cells, chemical looping combustion units, flares, and thermal or catalytic post-combustion units. Units with a rated thermal input under 3 MW and units which use exclusively biomass shall not be taken into account for the purposes of this calculation.

‘Units using exclusively biomass’ includes units which use fossil fuels only during start-up or shut-down of the unit.”

An exemption (de-minimis rule) to this aggregation clause is included: units with a rated thermal input below 3 MW are excluded, as well as units using exclusively biomass.

 

The Guidance on Interpretation of Annex I of the EU ETS Directive (excl. aviation activities) of 18 March 2010 remarks that the aggregation clause contained in the said point 3 of Annex I – and consequently the threshold of 3 MW - applies to the process for assessing whether an installation falls under the scope of the EU ETS – and not to the qualification under Article 27 of the Directive.

 

In other words, Article 27 does not provide a basis for leaving out biomass units and the 3 MW de-minimis units as these exclusions are only relevant when assessing whether an installation falls under the scope of the EU ETS.

 

The said Guidance consequently conclude that “when assessing the 35 MW and 25 000 t CO2(eq) threshold for possible exclusion from the Community scheme, also the fuel use (and CO2 emissions) from units with a rated thermal input of less than 3 MWth are included. It is therefore clear that the calculation of the 35 MW treshold does not provide the "earlier" exclusion of units below 3 MW thermal input and units using exclusively biomass, as these exclusions are only relevant when assessing whether an installation falls under the scope of the EU ETS”.

 

An example is also given when an installation operates a boiler of 28 MWth fired with natural gas, and a wood based boiler of 12 MWth. While the wood boiler is excluded for the aggregation, it is included for the purpose of checking the capacity threshold for possible exclusion. Since Article 27 does not refer to the same de-minimis rules as clause 3 of Annex I, all combustion units at the installation are to be considered. Thus the relevant capacity is 28 + 12 = 40 MWth, i.e. too high for a possible exclusion.

 



 

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