Comments on COM (2006) 676 Building a global market

image of Comments on COM (2006) 676 Building a global market

Directive 2003/87/EC established a scheme for greenhouse gas emission allowance trading, the EU ETS (European Union Emission Trading Scheme). In connection with the review of the Directive, called for in Article 30, the European Commission has published a communication report (COM(2006)676) raising some issues that should be included in the review. This report contains an overview analysis of these issues. The main focus is on issues related to the participation of small installations, but several other issues are also discussed.



Small installations

It is essential that the operating costs of the EU ETS are justified by the achieved environmental benefits. Given the marginal emissions of small installations, it is questionable if the principle of cost-effectiveness does also account for small installations under the current ETS rules. In order to comply with the ETS, all participating installations incur considerable fixed and variable costs. Generally, if these costs are too high in relation to the emission reduction potential, the overall purpose of the ETS to provide operators with an incentive to reduce emissions may be lost.


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