Assessment of the possible development of an EU-wide NOx and SO2 emissions trading scheme for IPPC installations Stakeholder meeting Friday 3rd April 2009 Questions and exchange of views
Structure of discussion Type of scheme Allocation method Emission rate Trading zones Coverage Opt-in and opt-out MRV
Please send additional feedback by 8 May 2009 to Lucia Lavric at lucia.lavric@entecuk.co.uk or Alistair Ritchie at alistair.ritchie@entecuk.co.uk
Options for trading scenarios Type of Scheme Cap & Trade: Design Risks Higher cost/ unit of product than projected Cap and Trade Allocation = Emission rate * Production (historical / projected) Baseline and Credit Allocation =Emission rate * Production (actual) Hybrid Allocation = Emission rate * Production * Adjustment Factor (to achieve emissions target) Windfall profit (under free allocation) Baseline & Credit: Design Risks Lower emission reductions than anticipated
Options for trading scenarios Allocation Method All allocation methods apply to all types of trading schemes
Options for trading scenarios Emission Rate Upper BREF BAT AEL Intermediate BREF BAT AEL Lower BREF BAT AEL Notes: No distinction between Cap & Trade and Baseline & Credit Expect to apply to allocation to individual installations and overall cap
Options for trading scenarios Trading zones Geographic scope of trading zones for IPPC installations MS level Different groups of MSs EU 27
Options for trading scenarios Coverage All IPPC installations covered by the EU ETS (revised) All IPPC installations covered by the EU ETS >=50 MW capacity Installations that meet specific coverage criteria
Options for trading scenarios Opt-in and opt-out Depends on coverage: full mandatory coverage is not compatible with individual installation opt-ins and opt-outs Depends on type of scheme: under Cap & Trade opting in entails gaming risks Depends on MRV provisions and treatment of small emitters May entail opt-out provisions for MS, depending on MRV provisions
Options for trading scenarios Monitoring, reporting and verification (MRV) Collate and review MRV requirements for SO2 and NOx for IPPC installations Review practices in SO2 and NOx trading schemes Assess EU ETS MRG for CO2 Determine desirable features of MRV of SO2 and NOx in an emissions trading scheme Identify preferred options