Government of Romania Ministry of Environment and Sustainable Development. Carmen SLANOVSCHI EXPERT Climate Change Directorate

Transcription

1 Government of Romania Ministry of Environment and Sustainable Development EU ETS in Romania Carmen SLANOVSCHI EXPERT Climate Change Directorate Understanding the Pilot Phase of EU ETS in EU 12 Member States 5-6 June 2008 Prague Czech Republic 1

2 Legal and Institutional Framework (1) Primary legislation G.D. no. 780/ transposes Directives 2003/87/EC & 2004/101/EC Secondary legislation M.O. no. 85/ methodology for the development of the NAP; M.O. no. 1897/2007 reviewing the GHG permit; competences & procedure for issuing and M.O. no. 1474/2007 operation & administration of the National GHG Registry; M.O. no. 589/ 2007 accreditation of verifiers (MEF); Decision 589/2007 on GHG greenhouse gas emissions monitoring and reporting. Draft secondary legislation M.O. procedure on the allocation for new entrants 2

3 Legal and Institutional Framework (2) Institutions involved in EU ETS : MESD coordinating the implementation of G.D. which transposes EU ETS Directives; NEPA implementing the G.D. provisions (monitoring &reporting plans, registry administration); REPAs - issuing GHG permits to IPPC installations, activity on data collection; LEPAs issuing GHG permits to non-ippc installations, activity on data collection; MEF developing and applying the procedure for the accredited verifiers. ISPE developing the top-down and bottom-up GHG projections. 3

4 NAP 2007 & 2008 NAP 2007 & (1) 2012 (1) consolidated version / separate assessment first version published - August 2006; notified to the EC - December 2006; 83,9 mil GHG allowances for 2007; yearly mean of 95,7 mil. GHG allowances for ; clarifications February & July 2007; revised NAP notified to EC - August 2007; EC Decisions on NAP for 2007 and October ,8 mil GHG allowances for 2007 ( -10,8%); an yearly mean of 75,9 mil. GHG allowances for ( - 20,7%). GD on NAP approved January 2008

5 NAP 2007 & (2) Criteria on NAP elaboration Annex III of the EU ETS Directive criteria; second Guidance Document National cap- compliant to EU indicative ceiling top-down projections; business-as-usual scenario; existing policies for emissions reduction taken into account. Historic emissions reference period adopted in the NAP is National Inventory Report (NIR) (year x-2), GDP & carbon intensity trends; 2004 NIR available but not realistic in terms of emissions from energy sector (- 40% under the Kyoto target). Projected emissions - factors taken into consideration: GDP & GDP structure & decoupling growth rates for GDP and GHG; Q development for the economy with accent on the ETS sectors. 5

6 NAP 2007 & (3) Projected emissions (IPCC) Approach Energy & non-energy sector; Energy sector subsectors: Energy supply; Energy conversion processes (refinery & petroleum, coke, electricity & heat); Energy consumers; ENPEP calculation method Assumptions finalization of the structural changes started in 2000; evolution of macroeconomic structure with similar EU trends; economic growth & substantial investments to achieve important changes in the macroeconomic structure 6

7 NAP 2007 & (4) Carbon intensity, GDP and total GHG emissions developments in the period carbon intensity decreased from % in 2000 to % in 2012; decreasing rate is relatively low due to the expected increase of coal use for heat production and industrial processes; the average annual GDP growth in 2003 of 6.02%; the expected growth factor for is 5.8% - the economic growth of 5.8% is much higher than the indicative figures in the 2nd Guidance; year 2000 is not a representative reference year for the trend of GHG emissions (deep economic restructuring process which began in early 1990 and lasted until 2003). the year 2003 is the most appropriate for Romania to reveal the upward trend in terms of GDP and downward trend in terms reduction in carbon intensity. 7

8 GDP and GHG evolution by sectors mil t CO2 echiv GDP billion Euro GHG emissions Energy sector(co2 emissions) GDP EUETS emissions Industrial sector(co2 emissions)

9 Allocation (1) Allocation at sector level (top-down) overall national cap minus allowances allocated for the early actions bonus and the new entrants reserve is subtracted (only for the period ) (SA = NC EA - NER) sector caps = share of the emissions of each sector in total emissions Allocation at installation level (8( sectors pulp and paper; 244/249 installations.) 8 sectors: energy, refineries, ferrous metal, cement, lime, glass, ceramics, historical approach - share of the installation relevant emissions in the relevant year; amount of allowances allocated - determined based on the share of each installation within the sector; meets the criterion the allocation is not more than the expected needs ; energy sector allocation decreased by: the reserve for the cogeneration bonus & the indirect JI set-aside 9

10 Allocation (2) Installations under EU-ETS ETS by sector Identified Installations 2007 Identified Installations Pulp and paper : 11 Energy : 152 Pulp and paper : 10 Energy : 146 Ceramics : 30 Ceramics : 28 Glass : 8 Cement : 7 Limestone : 9 Ferrous metals : 18 Refinerie : 9 Glass : 7 Cement : 7 Limestone : 9 Refineries : 9 Ferrous metals : 15

11 Reserve for Joint Implementation projects (JI set-aside) % national cap 0,66 (2007) / 1,91 ( ) covers both the direct & indirect double counting effect; indirect double counting effect - deducted from energy sector allocation; direct double counting effect - deducted from the installation s allocation were the JI projects occurred; Annex I of JI set-aside - 12 JI projects with Letter of Approval; total amount of allowances : 3,452,214; Annex II of JI set-aside - 3 JI projects with Letter of Endorsement; total amount of allowances: 3,854,846; 11

12 BONUS FOR ENERGY EFFICIENT CHP Romanian Phase I and Phase II NAP support the environmental benefits from the efficient combined generation of heat and power, by allocating additional allowances to installations that use efficient CHP technology; CHP bonus is calculated based on the CO2 emissions reduction ought to the fuel savings; The CHP bonus is granted if the following conditions are meat: - overall efficiency of the installations is minimum 65%; - fuel savings comparative to separate electricity and heat Q. new cogeneration installations - same treatment as existing installations; when allocation from NER they benefit from a special treatment compared to other types of new entrants. 12

13 BONUS FOR EARLY ACTION (7/Annex III) Reserve of 3,895,034 allowances for 2007 & 3,403, 451 allowances per year for ; award operators who have voluntarily invested in emission reduction in the period for both the 2007 period and ; planned investment targeting a reduction in GHG emissions additional to mandatory emissions reduction (resulted from implementing EU or national legislation) at the time when the action was taken; reserve subtracted from the overall cap; installations in all sectors are eligible for the early action bonus; not possible to receive both a bonus for early action and one for efficient CHP the relevant emissions are the average emissions of the two years with the highest emissions in the relevant period; 13

14 Banking & Auctioning & Transactions banking within the trading period is allowed; banking from the 1st to the 2nd phase not allowed. At the end of the 2 nd period Romanian Government will auction : - unused NER; -JI reserve. Romanian operators could freely buy/sell allowances on the EUA market trough bilateral contracts; On 21 st of April 2008 when the National GHG Emissions Registry started functioning operators could operate the transactions. 14

15 Effects of the first year of ETS in Romania most polluters received sufficient allocations; energy & mineral sectors under-allocated; low number of transactions with EUA s: selling surplus allowances not encouraging at the price; only few number of contracts; national registry functional only for a week, resulted in a low number of transactions; investing in low carbon technologies is a must, especially for the fast growing sectors; no sing of innovation linked to the predicted scarcity of allowances; no fuel change linked to ETS, rather to the price of the fuel (switch to biomass and biomass in the fuel-mix); from 244 installations 230 fully compliant; 5 with verified emissions report submitted but registry noncompliance; 9 noncompliant. 15

16 Conclusions so far ETS 2007 a trial year for Romania; time to trial the institutional set-up and the administration s capacity; not so challenging for operators as there was no significant underallocation but will be more binding from the 2008 on, especially for growing sectors like energy and minerals; operators changed perception on ETS ETS is revenue generating only when allowances exceed in a great amount verified emissions; in the following period is not expected a fast replacement of old technologies for the most important industrial sectors; rehabilitation of thermal plants and heat distribution networks in order to reduce heat loses and to increase efficiency; the majority of sectors will try to use existing capacities, with some rehabilitations for increasing their production and efficiency; various industries have been privatized or are in the process of privatization. These units are expected to significantly increase their production, hence their emissions. 16

17 Thank you! Carmen SLANOVSCHI Tel/fax: info on EU ETS 17