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Emissions trading after 2008: Allowances for carbon dioxide emission granted on application basis only
Application deadline for free allocations ends 19 November 2007
Year of issue
Date 07/09/2007
Date 07/09/2007
Businesses have until 19 November 2007 to apply for emissions allowances from the German Emissions Trading Authority (DEHSt) at the Federal Environment Agency (UBA). UBA is expecting up to 2,000 applications from businesses in the energy sector and high-emissions industries participating in emissions trading. Their facilities incur about one half of all the carbon dioxide (CO2) emissions produced in Germany. There is a total of 453.1 million tonnes CO2 emission allowances per year available in Germany for the 2008-2012 period. For the first trading period ending in 2007, installation operators were granted allowances equivalent to 499 million tonnes per year. A new background paper issued by UBA explains the allocation procedure.
Of the total budget of 453.1 million tonnes CO2, installations that have participated in emissions trading will continue to receive 379.1 million emission allowances per year free of charge. The reason for the change is that the federal government will no longer allocate 40 million free allowances per year, and other parts of the budget are earmarked for other types of installations during the new trading period, namely in the chemicals sector and for new installations.
The DEHSt at UBA distributes the stock of emissions allowances according to statutorially established regulations among participating installations, without exceeding its co-called cap. Should appropriated allowances exceed the total volume of available allowances, DEHSt reduces the surplus by making a proportionate cut in the 379.1 million allowances allocated to installations in the energy sector. Power plants are also subject to cuts to make allocation of saleable emissions in the budget possible. The energy sector accounts for some 80 per cent of carbon dioxide emissions in the emissions trading business. The extent of cuts can only be determined by DEHSt once all applications for allowances have been received.
More information is available in the (German) background paper "Emissionshandel: Wie Unternehmen Emissionsberechtigungen kostenlos erhalten" (Emissions trading: How businesses can obtain free emissions allowances).