Emission trading system with pollutants in Slovakia Lubomir Ziak Ministry of the Environment Bratislava, Slovakia 28th February 2007 CAFE Steering Group Meeting, Brussels

History of the emission trading in Slovakia Legal framework – Act No. 309/1991 on Air Protection as amended Possibility to set emission quotas was introduced in 1999 First year – 2002 During the period 2002 – 2006 a small number of transfers were carried out A share of sources involved into PETS - 80% 28th February 2007 CAFE Steering Group Meeting, Brussels

Act No. 572/2004 on trading with emission quotas Pollutant emissions trading system - basic information: Entrance into force – 1st January 2007 Trading period - 1 calendar year Pollutants – sulphur dioxide (SO2), nitrogen oxides as NO2 Participant of the trading system - mandatory participants - operators of certain installations (plants) – determined by the Act in Annex I table C - others participants - anybody who registers in the National Registry of the Emission Quotas (traders) 28th February 2007 CAFE Steering Group Meeting, Brussels

List of activities involved into PETS Energy activities (Combustion installations with a rated thermal input exceeding 50 MW) Production and processing of ferrous metals Mineral industry Mineral oil refineries Other activities (pulp from timber or other fibrous materials, paper and board with a production capacity exceeding 20 tonnes per day) 28th February 2007 CAFE Steering Group Meeting, Brussels

Permit for release of pollutants Each installation under the scope of the PETS has to have Permission for release of SO2 into air issued by the district office This permission is a base for registration of the installation in the Registry 28th February 2007 CAFE Steering Group Meeting, Brussels

Content of the permission Identification data on an operator, installation and emissions from this installation Emission monitoring requirements and the authorization of an emission amount determination Reporting requirements Other obligations of operator resulting from the Act 28th February 2007 CAFE Steering Group Meeting, Brussels

Allocation of pollutant quotas Legal frame – Ministerial Order No 131/2006 which determine national emission ceilings and total quotas for pollutants. There is only total allowances for SO2 for years 2007 and 2008 in division for districts Particular environmental district office allocates quotas to obligatory participants of PETS three months before trading period The total amounts of quotas for concrete district can not be exceeded Newcomers are engaged into the PETS not until next trading period 28th February 2007 CAFE Steering Group Meeting, Brussels

Gliding path to the NEC for SO2 28th February 2007 CAFE Steering Group Meeting, Brussels

Allocation of pollutant quotas – cont. Total amounts of 123 530 units of allowances (1 ton = 1 allowance) for SO2 were allocated by Ministerial Order 131/2007 for year 2007 District offices have allocated 112 272 tons SO2 (90 %) for 87 obligatory stakeholders which operate 115 installations Unallocated quotas remain at the account of the MoE (11 258 tons) Complete list of allocated quotas for obligatory participants you can find at the following web page   www.enviro.gov.sk – ochrana ovzdušia – iné – emisné kvóty 28th February 2007 CAFE Steering Group Meeting, Brussels

Transfer of allowances Restriction of validity and transfer of quotas Allowances are valid only for issued trading period There is prohibited to transfer allowances to a participant of the PETS which operate installation located in Air Quality Management Area (poor air quality) There is allowed to transfer allowances between participants of the PETS until 15th February of the year following after the trading period 28th February 2007 CAFE Steering Group Meeting, Brussels

CAFE Steering Group Meeting, Brussels Lesson learned A small number of stakeholders release into the atmosphere major part of SO2 emissions (5 operators - 78,8%) A real situation in SO2 emissions (97000 tons in 2004) and a high allocation of quotas (123530 tons for 2007) do not make the trading possible On the present the political willingness of policymakers for reducing quotas does not exist the Slovak market is too small 28th February 2007 CAFE Steering Group Meeting, Brussels

Conclusion Slovakia has introduced the Pollutant Emission Trading System This system will be functional in the future (2009 – 2010? and later) Thank you for your attention 28th February 2007 CAFE Steering Group Meeting, Brussels