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Thursday, 28 April 2011

Emissions trading: EC decided on allocation of allowances

The European Commission today adopted a Decision on how free emission allowances should be allocated from 2013 to industrial installations covered by the EU Emissions Trading System (EU ETS). Although auctioning will become the main principle for allocating allowances as of 2013, a proportion of free allowances will still be given to industry until 2020, notably to reduce costs for installations in sectors deemed to be exposed to significant competition from outside the EU. The Decision sets out the rules, including the benchmarks of greenhouse gas emissions performance, to be used by the Member States in calculating the number of allowances to be allocated for free annually in these sectors. […] A particular treatment will be given to installations in sectors or sub-sectors that are deemed to be exposed to a risk of "carbon leakage" – relocation to outside the EU – because they face competition from industries in third countries which are not subject to comparable carbon restrictions. The list of exposed sectors and sub-sectors was determined at the end of 2009. Installations in these sectors will receive allowances for free up to the level of the benchmark until 2020.

Source: European Commission