'Simplicity, transparency', for EU ETS - Dimas



Member states should ensure that their allocation plans for the next phase of the EU Emissions Trading Scheme (ETS) are simpler and more transparent than those for Phase I, says EU Environment Commissioner Stavros Dimas.
Writing in the June issue of Environmental Finance, Dimas also called on member states to work towards "greater harmonisation and consistency" among their national allocation plans (NAPs), which will set carbon dioxide (CO2) reduction targets on industrial installations and power plants from 2008 to 2012.
And he warned that the Commission would be "tough where necessary" to ensure that the NAPs contribute to member states meeting their Kyoto Protocol greenhouse gas emissions goals.
"To improve the way the emissions trading scheme functions in the second period, we need more of three things: simplicity, transparency and consistency," Dimas writes, arguing that "regulators [should] resist their instinctive tendency to build in 'command-and-control'-style rules and complexity".
He adds that "Second period NAPs need to be made more accessible and more easily understandable to outside stakeholders in terms of the approach taken and the key data and assumptions underlying each plan."
On harmonisation, he singles out the treatment of combustion installations, noting that the Commission's relatively relaxed response to member states' differing definitions of the term for the Phase I NAPs – which covered 2005-07 – would not be repeated in its assessment of Phase II plans.
Member states have until June 30 to submit their Phase II NAPs, which the Commission will assess to ensure that they are in line with the Emissions Trading Directive, which established the EU ETS.
The scheme, which caps CO2 from some 11,500 facilities across the EU-25, representing around half of the bloc's total emissions of CO2, is designed to help the EU meet its targets under the Kyoto Protocol.
It has come under heavy criticism in recent weeks, following the emergence of data showing that governments have allocated allowances to companies for the first phase of the scheme significantly in excess of their emissions. The Commission has repeatedly warned that such over-allocation will not be tolerated for Phase II.