Emissions Trading System Capacity Building

Transcription

1 Emissions Trading System Capacity Building 0

2 Selection of Installations Covered by Emissions Trading Experiences from the Starting Phase of the EU ETS in Germany Lars Hoffmann Emissions Trading Legal Office, 10 September 2014

3 Outline General Questions of Scope Scope of the EU ETS (Phase III) - overview Definition of Installation s boundaries New Entrants, Extensions, Reductions Cessations and Splits and Mergers Scope of EU ETS (Phase I and II) Scope of EU ETS (Phase III) 3

4 General Questions of Scope Activities / installations covered Industrial activities to be included Gases to be included Criteria for the inclusion of installations Emissions thresholds Capacity thresholds (thermal rated input / maximum production) Installation boundaries Permit system in place? (e.g. IED permit) Identification of installations covered Competent authorities, applications 4

5 Scope of EU ETS (Phase III) - Overview Installation is covered if criteria in Annex I of EU ETS-Directive apply Combustion units with a thermal rated input of 20 MW or more Exhaustive list of industrial activities covered Additional criteria for activities listed in Annex I: Rated thermal input: => included are all steel producing installations with a rated thermal input of 20 MW Production capacity => glass installations with a production capacity of 20 t per day Relevant values (production capacity / rated thermal input) are set out in IED permit or need to be calculated 5

6 Definition of Installation s Boundaries IED permit under Directive 2010/75/EU (Industry Emissions) Sets out relevant boundaries Lists physical parts which are part of the installation IED permit is issued by the federal authorities of the German Länder Is the only relevant permit for the installation (includes building license, all other permits) Also functions as Greenhouse Gas (GHG) permit under the ETS Directive (Directive 2003/87/EC ETS Directive) in Germany (different in other Member States) System boundaries of IED permit and scope of EU ETS Installation fully included if IED permit matches the ETS activity description Installation partly included in the EU ETS: IED permit sets out main activity (not listed in Annex I ) but installation carries out additional activity 6

7 IED Permit and Scope of EU ETS Installation with activities covered and not covered by EU ETS Automobile production (not covered by EU ETS) Combustion of fuels 20 MW (covered by EU ETS) EU ETS installations boundaries 7

8 New Entrants, Extensions, Reductions New Entrants New installation that starts operations => fully enters scope after starting operations Extensions Installations extended, which fall under the scope after extension e.g. installation has two boilers of 8 MW (16 MW total), threshold of 20 MW is met after a third boiler is added => whole installation enters scope Extensions of existing installations e.g. installation is already covered by the ETS, third boiler is added => whole installation is covered by ETS including third boiler Reductions Installations reduced below thresholds e.g. one boiler is removed and total rated thermal input falls below 20 MW => whole installation leaves scope 8

9 Cessations, Splits and Mergers Cessations Installations lose IED permit and ceases operation => installations leave scope from the date the IED permit is cancelled Splits and mergers No change in the total quantity of emissions to be reported Split of installations Installation may split if parts are sold to other operators; IED permit is adherent to the physical parts of the installation => if installation gets split-up, the ETS installation accordingly splits into two different ETS installations Merger of installations => if two installations merge, operator of the installation has to report for the whole installation 9

10 Steps within EU ETS and beyond EU ETS 1st Phase Pilot phase: learning by doing EU ETS 2nd Phase Stabilisation and refinement: first commitment period under the Kyoto Protocol EU ETS 3rd Phase Consolidation & European harmonisation linkage towards a global carbon market 10

11 EU ETS Scope in Phase I and II Phase I ( Pilot phase ) Energy generation (thermal rated input 20 MW) Refineries Iron and steel industry Mineral industry (cement, lime, glass, ceramic products) Other industries (pulp and paper) Exceptions: Installations receiving financial rewards under Renewable Energies Act Waste incineration units Installations without greenhouse gas emissions Installations for testing new technologies Phase II Inclusion of new activities: Propylene / ethylene production Furnace production; Flares for the combustion of gases ( 20 MW) 11

12 EU ETS Scope in Phase III Phase III EU-wide harmonised allocation rules Inclusion of new sectors Chemical sector Non-ferrous metals CCS Any combustion unit with a rated thermal input 20 MW Inclusion of new gases N 2 O (chemical industry) PFC (alloy production) Exceptions: Installations without GHG emissions now included if activity is listed in Annex I (due to allocation rules for cross-boundary heat flows) 12

13 Lessons Learned Legal Provisions Main criteria: emissions of GHG or activity included in Annex I? Exhaustive list of sectors included is favourable Definition of bulk organic chemicals: polymers included? Exceptions need to be formulated clearly enough Waste incineration installations vs. co-incineration units => main purpose energy production or waste incineration? How to determine? Exception for installations for testing technologies on the pilot plant scale => What is pilot plant scale? Needs to be laid down in the permit? Comprehensibility of the rules Complex rules for summing up various combustion units ( aggregation rule ) bear the risk of legal uncertainty Competences Germany: Diverging decisions between different federal state authorities / DEHSt and federal state authorities 13

14 Thank you for your attention! Lars Hoffmann Internet: This presentation is based on a speech held by the German Emissions Trading Authority (DEHSt) and is not clear for publication. Check against delivery. References and quotations from the presentation must at all times be approved in written form by the DEHSt.