EU emissions trading directive transposed into national law
The Federal Cabinet adopted a draft amendment to the Greenhouse Gas Emissions Trading Act (TEHG) today. The amendment to the TEHG transposes comprehensive amendments to the EU Emissions Trading Directive into national law. "Emissions trading is the key instrument to reduce greenhouse gas emissions. The amended TEHG makes emissions trading in Germany fit for the coming trading period. From 2012, more than 2,000 installations and 200 airlines will participate in emissions trading. We have effectively updated emissions trading legislation in Germany with this amendment, and we have made use of the wide scope of the Emissions Trading Directive to ease the burden on small installations," said Federal Environment Minister Norbert Röttgen.
Pursuant to European law, emissions trading will include aviation from 2012 and other emission-intensive industrial sectors from 2013. Total emissions for all installations subject to emissions trading will be reduced by 1.74 percent every year from 2013. Emissions trading will thus make the largest contribution to reducing greenhouse gas emissions in Europe between 2013 and 2020. The fact that emission budgets were stipulated for the long term creates a reliable framework for emissions trading and enhances investment security.
From 2013, emissions trading will be harmonised to a greater extent throughout Europe. This applies in particular to the rules governing free allocation of allowances and auctioning. So far, the 27 member states have laid down their own rules for free allocation. From 2013 all member states have to apply uniform EU rules. For most installations the amount of allowances allocated is based on ambitious benchmarks.
"From 2013 the EU rules on allocation will eliminate the previous distortion of competition. If there are uniform allocation rules, the most efficient companies will be at an advantage in future. For German industry this is an opportunity and a challenge to remain at the spearhead of efficient technologies," said Minister Röttgen.
From 2013 there will be no more free allowances for electricity generation. Power plant operators will have to pay for the emission allowances they need. This does not justify a rise in electricity prices as plant operators have been passing on the price of emission allowances to their customers in full since 2005, even though they received free allowances. From 2013 about five times as many emission allowances will be auctioned in Germany compared to the current trading period (2008-2012). More than 90 percent of the revenues from auctioning will be used for national and international climate protection and measures implementing the energy concept.
The harmonisation of EU emissions trading from 2013 reduces the need for national rules. The amended Greenhouse Gas Emissions Trading Act serves the purpose of incorporating the rules of EU emissions trading into the German legal system and regulating the enforcement of the Act. The competences of the federal and Länder governments regarding the enforcement are defined more clearly than before. For example, in future emissions monitoring will be a responsibility of the German Emissions Trading Authority (DEHSt) at the Federal Environment Agency. This nationwide uniform monitoring of reporting ensures that with regard to emissions trading the same conditions for competition apply to all companies in Germany.
The draft envisages less stringent rules for small installations. Operators of plants emitting less than 25,000 tonnes CO2 per annum can apply for exemption from emissions trading if they commit to carrying out equivalent measures to reduce emissions.