UK to devise standalone carbon permit system
London – The UK said it will opt out of a common European Union platform for auctioning carbon permits in the next phase of the bloc's emissions-trading programme, which starts in 2013, and will develop a national system instead.
The EU, which has given away the majority of allowances since starting its cap-and-trade programme in 2005, will require most emitters to purchase their allotments from 2013. While the EU regulator favours a common auctioning platform, saying a centralised approach offers the best "value for money," it is giving member states the option of running their own auctions.
Britain, which already auctions some carbon permits in the current 2008-2012 trading period, notified the European Commission about its plans yesterday, according to a statement published on the Department of Energy and Climate Change website. Earlier this week, Poland and Germany announced similar opt-out decisions. That means that the bloc's three biggest emitters will have their own auctioning platforms.
The EU will sell about 60 per cent of all carbon dioxide permits in 2013, according to estimates by the European Commission, the bloc's executive. That proportion of sales versus free permits will rise in subsequent years as part of a strategy to use the world's biggest cap-and-trade programme to cut emissions.
The cap for carbon dioxide discharges for 2013 has been set at 2.04 billion tonnes, worth about €30 billion (Dh150 billion) at yesterday's prices. Aluminum and chemical makers join the programme in the next phase of operation, which runs through 2020. Airlines become part of the programme next year. The EU agreed that auctioning platforms should be established through an "open, transparent and competitive selection procedure."
Every application for individual auctions will be subject to approval by other member countries. The executive board of the United Nations' carbon market revised procedures for registering projects and adopted a two-year plan to improve efficiency and integrity, the UN regulator said.
The goals of the business plan for the Clean Development Mechanism, the world's second-biggest carbon market, also include improved regional distribution, better transparency and enhanced promotion, according to a statement issued after a meeting in Bonn that ended on Friday. The CDM, created under the UN's climate-protection Kyoto Protocol, generates emission-reduction credits for projects that cut greenhouse gases in developing nations. Investors can use those credits for compliance in the European Union's emissions trading system, the world's largest.
The procedures for registering projects were revised in line with a request by parties to the Kyoto Protocol at their December meeting in Cancun, Mexico. "Registered projects will now be eligible to earn emission-reduction credits from the date that a complete request for registration was submitted," the secretariat of the UN Framework Convention on Climate Change said in the e-mailed statement. – Agencies
The CDM has issued 549 million Certified Emission Reduction credits by February 18, according to a report from the meeting published on the UN website. CERs for delivery in December 2011 closed at 11.50 euros yesterday, while the EU allowances cost 14.99 euros.