Legal Alert
Backloading new options - European Commission release of 21 November 2013
Legal Alert
Monday, 25 November 2013 17:05


European Commission options elaborated (EC release of 21 November 2013) due to legislative delays and the lack of possibility to apply backloading in 2013 are available here.


They are rather simple, they consist in:


1) backloading as of 2014 on the basis of the initial profile, meaning the postponement of backloaded volumes from previously scheduled years 2013, 2014 and 2015 in identical proportions into the subsequent years 2014, 2015 and 2016 (option 1);



2) the distribution of the 2013 backloaded volumes into years 2014 and 2015 - effecting (as opposite to the option 1) in no backloaded volumes in 2016 (option 2).


Under option 1 a sub-option has been differentiated which consists in adding a provision in the following wording:

"Where in 2014 the volume of reduction set out in Annex II cannot be spread over a period of more than [x] months it shall be decreased by [xxx] million allowances. In that case, the volumes of reduction for 2015 and 2016 shall be adjusted in equal instalments accordingly."


See more on the issue.


Recent Auctioning Regulation amendment
Legal Alert
Monday, 25 November 2013 11:57


A new amendment to the Auctioning Regulation - see: Commission Regulation No 1143/2013 of 13 November 2013 amending Regulation (EU) No 1031/2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowances trading within the Community in particular to list an auction platform to be appointed by Germany (OJ L 303, 14.11.2013, p. 10).


On the occasion of regulating the status of EEX as an auction platform several other changes have been made to the Auctioning Regulation. Among them are:


- Technical adaptations necessary due to current delays in auction monitor appointment: additions in places providing for the auction monitor competences of the phrase: "if appointed" (new Article 7, paragraph 7, Article 8, paragraph 3 of the Auctioning Regulation).


- Changes in the publication of the auction calendar: auction platform should determine and publish the bidding windows, individual volumes, auction dates as well as the auctioned product, payment and delivery dates of emission allowances to be auctioned in individual auctions each calendar year, by 30 September (instead of 28 February in the earlier text) of the previous year (amendment to Article 11, paragraph 11 of the Auctioning Regulation).


- Clarification on the relation of the admission to the auctions and becoming a member of or a participant in the secondary market: admission to the auctions must not be dependent on becoming a member of or a participant in the secondary market organised by the auction platform or any other trading place operated by the auction platform or by any third party (Article 16, paragraph 1a of the Auctioning Regulation).


For more on the issue see here.


Limited powers for intervention on the carbon market granted to the European Commission on 3 July 2013
Legal Alert
Monday, 08 July 2013 13:15


The European Parliament's files documenting backloading vote in the plenary on the 3 July 2013 show the European legislative body decided to rein in the executive's ambitions to influence carbon market in the administrative way.


Backloading major breakthrough
Legal Alert
Wednesday, 19 June 2013 18:25


The EU Parliament's environment committee's (ENVI) second vote on a draft law to prop up EU carbon prices on 19 June 2013 has brought a major legislative breakthrough. ENVI supported the text granting the European Commission the right to adapt "in exceptional circumstances" the timing of auctions, provided an impact assessment shows the sectors concerned will not face "significant risk" of companies relocating outside the EU. "The Commission shall make no more than one such adaptation and only in the third phase of ETS 2013-2020", the text adds.


Credits withheld should be reintroduced "in a predictable and linear manner starting from the year following that during which allowances have last been withheld" the text says. The original draft from the Commission proposed returning them in 2019-2020. A vote in the full assembly is scheduled for 3 July 2013.


The underlying cause of the entire problem is an economic slowdown and an over-allocation of emission permits in the period 2013-2020. The idea of one-off adaptation expressed in the recent ENVI opinion does not answer the question whether in the case of economic recovery the timing of auctions will be once more adjusted. Presumably it will not. Given EU ETS was designed a priori as a market-based scheme such political intervention poses a precedence and inevitably rises many doubts.


The above notwithstanding, certain problems, like for instance the relation of the back-loading to the derogation provided for in Article 10c of the ETS Directiveare to be resolved.

Joint statement Energy and Environment Ministers from nine European member states of 7 May 2013
Legal Alert
Wednesday, 08 May 2013 10:06


The EU Parliament's environment committee's second vote on a draft law to prop up EU carbon prices is scheduled for June 19 before a vote in the full assembly in July.

The joint statement Energy and Environment Ministers from nine European member states of 7 May 2013 stressed they want to see this year to reform the EU's Emissions Trading System (ETS) to ensure it remains at the forefront of EU policies to combat climate change and drive low carbon investments.

The joint statement sets out clear direction and deadlines on next steps on EU ETS reform including calls for national governments in the Council and MEPs in the Parliament to come to a resolution to backloading proposals by July 2013 at the latest as well as calls for the European Commission to produce a legislative proposal to deliver proper structural reform to the EU ETS by the end of 2013 at the latest.


The full text of the joint statement Energy and Environment Ministers from nine European member states of 7 May 2013 is available here. 


See also the background on the Auctioning Regulation and the concise legislative history of the backloading issue. remains skeptical on the reasons for backloading intervention (see 'Why EU ETS does not apply auction purchase limit and holding limit'), given, among many other risks, the speculative potential of the initiative).


ERU restrictions as from 2013
Legal Alert
Sunday, 16 December 2012 13:40


Pursuant to the European Commission communication of 13 December 2013 the Climate Change Committee debates the amendments to the Registry Regulation which relate to international credits generated from Joint Implementation (Emission Reduction Units -  ERUs). The Commission signalled that draft texts for the following provisions were presented to the said Committee:


1. in accordance with rules on avoiding the double counting of emission reductions  ERUs from projects hosted in Member States related directly or indirectly to activities within the scope of ETS in phase 2 may be issued no later than 31 December 2012;


2. ERUs for emission reductions taking place before 31 December 2012 from projects hosted in Member States related to activities not directly or indirectly in the scope of ETS in phase 2, but included in the scope of ETS from phase 3 onwards, may be issued no later than 30 April 2013;


3. ERUs for emission reductions taking place before 31 December 2012 from projects hosted in third countries not having legally binding quantified emission reductions in the period 2013-2020 may be held in the Union registry provided they are issued by 30 April 2013 and verified in accordance with Joint Implementation track 2 procedures.


The Commission noted in the said communication that the debate “showed growing consensus on the substance of these amendments.”



Carry-over of AAUs surplus, LULUCF mechanisms and maket-based instruments - conclusions of the Environment Council of 10 October 2011 for the Durban Conference
Legal Alert
Thursday, 20 October 2011 20:53


Bearing in mind the issues of the AAUs carry-over, the LULUCF, offset credits and other flexible mechanisms are currently the “hot topics” and are burdened with far-reaching economical consequences, let’s see what expressions in that regard the environment ministers were able to agree in the official document adopted at the last meeting.


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