EU approves more free allocations for ETS phase 3

London, 9 July (Argus) — The European Commission has approved the allocation of just over 233mn free EU emissions trading scheme (ETS) allowances for phase 3 of the scheme (2013-20) to power installations in Bulgaria, the Czech Republic and Romania.

The commission has already approved the allocation of nearly 35mn free allowances to Cyprus, Estonia and Lithuania. The number of free allocations to installations will be reduced each year, reaching zero in 2020.

The commission's assessments of the Hungarian and Polish applications are pending and will be concluded soon.

Under revised EU ETS legislation adopted in 2009, 10 member states were given temporary exemption from the rule that, from 2013 onwards, the power sector must buy all its EU ETS allowances at auctions or in the market.

The free allocation of allowances must finish in 2019 at the latest, with the number of allowances limited to covering no more than 70pc of emissions from domestic electricity supply in 2013, declining annually thereafter.

Member states have to ensure that the free allowances' monetary value is at least matched, if not exceeded, by corresponding investment in their electricity infrastructure, including building new power plants and diversifying into clean technologies.

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