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Document 02003L0087-20230301
Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for greenhouse gas emission allowance trading within the Union and amending Council Directive 96/61/EC (Text with EEA relevance)Text with EEA relevance
Consolidated text: Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for greenhouse gas emission allowance trading within the Union and amending Council Directive 96/61/EC (Text with EEA relevance)Text with EEA relevance
Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for greenhouse gas emission allowance trading within the Union and amending Council Directive 96/61/EC (Text with EEA relevance)Text with EEA relevance
02003L0087 — EN — 01.03.2023 — 014.001
This text is meant purely as a documentation tool and has no legal effect. The Union's institutions do not assume any liability for its contents. The authentic versions of the relevant acts, including their preambles, are those published in the Official Journal of the European Union and available in EUR-Lex. Those official texts are directly accessible through the links embedded in this document
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DIRECTIVE 2003/87/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 13 October 2003 establishing a ►M9 system ◄ for greenhouse gas emission allowance trading within the ►M9 Union ◄ and amending Council Directive 96/61/EC (OJ L 275 25.10.2003, p. 32) |
Amended by:
Amended by:
|
TREATY CONCERNING THE ACCESSION OF THE REPUBLIC OF CROATIA TO THE EUROPEAN UNION |
L 112 |
21 |
24.4.2012 |
Corrected by:
DIRECTIVE 2003/87/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 13 October 2003
establishing a ►M9 system ◄ for greenhouse gas emission allowance trading within the ►M9 Union ◄ and amending Council Directive 96/61/EC
(Text with EEA relevance)
CHAPTER I
GENERAL PROVISIONS
Article 1
Subject matter
This Directive establishes a ►M9 system ◄ for greenhouse gas emission allowance trading within the ►M9 Union ◄ (hereinafter referred to as the ‘ ►M9 EU ETS ◄ ’) in order to promote reductions of greenhouse gas emissions in a cost-effective and economically efficient manner.
This Directive also provides for the reductions of greenhouse gas emissions to be increased so as to contribute to the levels of reductions that are considered scientifically necessary to avoid dangerous climate change.
This Directive also lays down provisions for assessing and implementing a stricter ►M9 Union ◄ reduction commitment exceeding 20 %, to be applied upon the approval by the ►M9 Union ◄ of an international agreement on climate change leading to greenhouse gas emission reductions exceeding those required in Article 9, as reflected in the 30 % commitment endorsed by the European Council of March 2007.
Article 2
Scope
Article 3
Definitions
For the purposes of this Directive the following definitions shall apply:
‘allowance’ means an allowance to emit one tonne of carbon dioxide equivalent during a specified period, which shall be valid only for the purposes of meeting the requirements of this Directive and shall be transferable in accordance with the provisions of this Directive;
‘emissions’ means the release of greenhouse gases into the atmosphere from sources in an installation or the release from an aircraft performing an aviation activity listed in Annex I of the gases specified in respect of that activity;
‘greenhouse gases’ means the gases listed in Annex II and other gaseous constituents of the atmosphere, both natural and anthropogenic, that absorb and re-emit infrared radiation;
‘greenhouse gas emissions permit’ means the permit issued in accordance with Articles 5 and 6;
‘installation’ means a stationary technical unit where one or more activities listed in Annex I are carried out and any other directly associated activities which have a technical connection with the activities carried out on that site and which could have an effect on emissions and pollution;
‘operator’ means any person who operates or controls an installation or, where this is provided for in national legislation, to whom decisive economic power over the technical functioning of the installation has been delegated;
‘person’ means any natural or legal person;
‘new entrant’ means any installation carrying out one or more of the activities listed in Annex I, which has obtained a greenhouse gas emissions permit for the first time within the period starting from three months before the date for submission of the list under Article 11(1), and ending three months before the date for the submission of the subsequent list under that Article;
‘the public’ means one or more persons and, in accordance with national legislation or practice, associations, organisations or groups of persons;
‘tonne of carbon dioxide equivalent’ means one metric tonne of carbon dioxide (CO2) or an amount of any other greenhouse gas listed in Annex II with an equivalent global-warming potential;
‘Annex I Party’ means a Party listed in Annex I to the United Nations Framework Convention on Climate Change (UNFCCC) that has ratified the Kyoto Protocol as specified in Article 1(7) of the Kyoto Protocol;
‘project activity’ means a project activity approved by one or more Annex I Parties in accordance with Article 6 or Article 12 of the Kyoto Protocol and the decisions adopted pursuant to the UNFCCC or the Kyoto Protocol;
‘emission reduction unit’ or ‘ERU’ means a unit issued pursuant to Article 6 of the Kyoto Protocol and the decisions adopted pursuant to the UNFCCC or the Kyoto Protocol;
‘certified emission reduction’ or ‘CER’ means a unit issued pursuant to Article 12 of the Kyoto Protocol and the decisions adopted pursuant to the UNFCCC or the Kyoto Protocol;
‘aircraft operator’ means the person who operates an aircraft at the time it performs an aviation activity listed in Annex I or, where that person is not known or is not identified by the owner of the aircraft, the owner of the aircraft;
‘commercial air transport operator’ means an operator that, for remuneration, provides scheduled or non-scheduled air transport services to the public for the carriage of passengers, freight or mail;
‘administering Member State’ means the Member State responsible for administering the ►M9 EU ETS ◄ in respect of an aircraft operator in accordance with Article 18a;
‘attributed aviation emissions’ means emissions from all flights falling within the aviation activities listed in Annex I which depart from an aerodrome situated in the territory of a Member State and those which arrive in such an aerodrome from a third country;
‘historical aviation emissions’ means the mean average of the annual emissions in the calendar years 2004, 2005 and 2006 from aircraft performing an aviation activity listed in Annex I;
‘combustion’ means any oxidation of fuels, regardless of the way in which the heat, electrical or mechanical energy produced by this process is used, and any other directly associated activities, including waste gas scrubbing;
‘electricity generator’ means an installation that, on or after 1 January 2005, has produced electricity for sale to third parties, and in which no activity listed in Annex I is carried out other than the ‘combustion of fuels’.
CHAPTER II
AVIATION
Article 3a
Scope
The provisions of this Chapter shall apply to the allocation and issue of allowances in respect of aviation activities listed in Annex I.
Article 3b
Aviation activities
By 2 August 2009, the Commission shall, in accordance with the ►M9 examination procedure referred to in Article 22a(2) ◄ , develop guidelines on the detailed interpretation of the aviation activities listed in Annex I.
Article 3c
Total quantity of allowances for aviation
This percentage may be reviewed as part of the general review of this Directive.
Article 3d
Method of allocation of allowances for aviation through auctioning
Member States shall inform the Commission of actions taken pursuant to the first subparagraph of this paragraph.
Article 3e
Allocation and issue of allowances to aircraft operators
At least 15 months before the start of each period referred to in Article 3c(2) or, in relation to the period referred to in Article 3c(1), by 30 September 2011, the Commission shall calculate and adopt a decision setting out:
the total quantity of allowances to be allocated for that period in accordance with Article 3c;
the number of allowances to be auctioned in that period in accordance with Article 3d;
the number of allowances in the special reserve for aircraft operators in that period in accordance with Article 3f(1);
the number of allowances to be allocated free of charge in that period by subtracting the number of allowances referred to in points (b) and (c) from the total quantity of allowances decided upon under point (a); and
the benchmark to be used to allocate allowances free of charge to aircraft operators whose applications were submitted to the Commission in accordance with paragraph 2.
The benchmark referred to in point (e), expressed as allowances per tonne-kilometre, shall be calculated by dividing the number of allowances referred to in point (d) by the sum of the tonne-kilometre data included in applications submitted to the Commission in accordance with paragraph 2.
Within three months from the date on which the Commission adopts a decision under paragraph 3, each administering Member State shall calculate and publish:
the total allocation of allowances for the period to each aircraft operator whose application it submitted to the Commission in accordance with paragraph 2, calculated by multiplying the tonne-kilometre data included in the application by the benchmark referred to in paragraph 3(e); and
the allocation of allowances to each aircraft operator for each year, which shall be determined by dividing its total allocation of allowances for the period calculated under point (a) by the number of years in the period for which that aircraft operator is performing an aviation activity listed in Annex I.
Article 3f
Special reserve for certain aircraft operators
In each period referred to in Article 3c(2), 3 % of the total quantity of allowances to be allocated shall be set aside in a special reserve for aircraft operators:
who start performing an aviation activity falling within Annex I after the monitoring year for which tonne-kilometre data was submitted under Article 3e(1) in respect of a period referred to in Article 3c(2); or
whose tonne-kilometre data increases by an average of more than 18 % annually between the monitoring year for which tonne-kilometre data was submitted under Article 3e(1) in respect of a period referred to in Article 3c(2) and the second calendar year of that period;
and whose activity under point (a), or additional activity under point (b), is not in whole or in part a continuation of an aviation activity previously performed by another aircraft operator.
An allocation to an aircraft operator under paragraph 1(b) shall not exceed 1 000 000 allowances.
An application under paragraph 2 shall:
include verified tonne-kilometre data in accordance with Annexes IV and V for the aviation activities listed in Annex I performed by the aircraft operator in the second calendar year of the period referred to in Article 3c(2) to which the application relates;
provide evidence that the criteria for eligibility under paragraph 1 are fulfilled; and
in the case of aircraft operators falling within paragraph 1(b), state:
the percentage increase in tonne-kilometres performed by that aircraft operator between the monitoring year for which tonne-kilometre data was submitted under Article 3e(1) in respect of a period referred to in Article 3c(2) and the second calendar year of that period;
the absolute growth in tonne-kilometres performed by that aircraft operator between the monitoring year for which tonne-kilometre data was submitted under Article 3e(1) in respect of a period referred to in Article 3c(2) and the second calendar year of that period; and
the absolute growth in tonne-kilometres performed by that aircraft operator between the monitoring year for which tonne-kilometre data was submitted under Article 3e(1) in respect of a period referred to in Article 3c(2) and the second calendar year of that period which exceeds the percentage specified in paragraph 1(b).
Subject to paragraph 6, the benchmark shall be calculated by dividing the number of the allowances in the special reserve by the sum of:
the tonne-kilometre data for aircraft operators falling within paragraph 1(a) included in applications submitted to the Commission in accordance with paragraphs 3(a) and 4; and
the absolute growth in tonne-kilometres exceeding the percentage specified in paragraph 1(b) for aircraft operators falling within paragraph 1(b) included in applications submitted to the Commission in accordance with paragraphs 3(c)(iii) and 4.
Within three months from the date on which the Commission adopts a decision under paragraph 5, each administering Member State shall calculate and publish:
the allocation of allowances from the special reserve to each aircraft operator whose application it submitted to the Commission in accordance with paragraph 4. This allocation shall be calculated by multiplying the benchmark referred to in paragraph 5 by:
in the case of an aircraft operator falling within paragraph 1(a), the tonne-kilometre data included in the application submitted to the Commission under paragraphs 3(a) and 4;
in the case of an aircraft operator falling within paragraph 1(b), the absolute growth in tonne-kilometres exceeding the percentage specified in paragraph 1(b) included in the application submitted to the Commission under paragraphs 3(c)(iii) and 4; and
the allocation of allowances to each aircraft operator for each year, which shall be determined by dividing its allocation of allowances under point (a) by the number of full calendar years remaining in the period referred to in Article 3c(2) to which the allocation relates.
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Article 3g
Monitoring and reporting plans
The administering Member State shall ensure that each aircraft operator submits to the competent authority in that Member State a monitoring plan setting out measures to monitor and report emissions and tonne-kilometre data for the purpose of an application under Article 3e and that such plans are approved by the competent authority in accordance with ►M4 the ►M9 acts ◄ referred to in Article 14 ◄ .
CHAPTER III
STATIONARY INSTALLATIONS
Article 3h
Scope
The provisions of this Chapter shall apply to greenhouse gas emissions permits and the allocation and issue of allowances in respect of activities listed in Annex I other than aviation activities.
Article 4
Greenhouse gas emissions permits
Member States shall ensure that, from 1 January 2005, no installation carries out any activity listed in Annex I resulting in emissions specified in relation to that activity unless its operator holds a permit issued by a competent authority in accordance with Articles 5 and 6, or the installation is excluded from the ►M9 EU ETS ◄ pursuant to Article 27. This shall also apply to installations opted in under Article 24.
Article 5
Applications for greenhouse gas emissions permits
An application to the competent authority for a greenhouse gas emissions permit shall include a description of:
the installation and its activities including the technology used;
the raw and auxiliary materials, the use of which is likely to lead to emissions of gases listed in Annex I;
the sources of emissions of gases listed in Annex I from the installation; and
the measures planned to monitor and report emissions in accordance with the ►M9 acts ◄ referred to in Article 14.
The application shall also include a non-technical summary of the details referred to in the first subparagraph.
Article 6
Conditions for and contents of the greenhouse gas emissions permit
A greenhouse gas emissions permit may cover one or more installations on the same site operated by the same operator.
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Greenhouse gas emissions permits shall contain the following:
the name and address of the operator;
a description of the activities and emissions from the installation;
a monitoring plan that fulfils the requirements under the ►M9 acts ◄ referred to in Article 14. Member States may allow operators to update monitoring plans without changing the permit. Operators shall submit any updated monitoring plans to the competent authority for approval;
reporting requirements; and
an obligation to surrender allowances, other than allowances issued under Chapter II, equal to the total emissions of the installation in each calendar year, as verified in accordance with Article 15, within four months following the end of that year.
Article 7
Changes relating to installations
The operator shall inform the competent authority of any planned changes to the nature or functioning of the installation, or any extension or significant reduction of its capacity, which may require updating the greenhouse gas emissions permit. Where appropriate, the competent authority shall update the permit. Where there is a change in the identity of the installation's operator, the competent authority shall update the permit to include the name and address of the new operator.
Article 8
Coordination with Directive 2010/75/EU
Member States shall take the necessary measures to ensure that, where installations carry out activities that are included in Annex I to Directive 2010/75/EU of the European Parliament and of the Council ( 1 ), the conditions and procedure for the issue of a greenhouse gas emissions permit are coordinated with those for the issue of a permit provided for in that Directive. The requirements laid down in Articles 5, 6 and 7 of this Directive may be integrated into the procedures provided for in Directive 2010/75/EU.
Article 9
►M9 Union ◄ -wide quantity of allowances
The ►M9 Union ◄ -wide quantity of allowances issued each year starting in 2013 shall decrease in a linear manner beginning from the mid-point of the period from 2008 to 2012. The quantity shall decrease by a linear factor of 1,74 % compared to the average annual total quantity of allowances issued by Member States in accordance with the Commission Decisions on their national allocation plans for the period from 2008 to 2012. ►A1 The ►M9 Union ◄ -wide quantity of allowances will be increased as a result of Croatia's accession only by the quantity of allowances that Croatia shall auction pursuant to Article 10(1). ◄
Starting in 2021, the linear factor shall be 2,2 %.
Article 9a
Adjustment of the ►M9 Union ◄ -wide quantity of allowances
In respect of installations carrying out activities listed in Annex I, which are only included in the ►M9 EU ETS ◄ from 2013 onwards, Member States shall ensure that the operators of such installations submit to the relevant competent authority duly substantiated and independently verified emissions data in order for them to be taken into account for the adjustment of the ►M9 Union ◄ -wide quantity of allowances to be issued.
Any such data shall be submitted, by 30 April 2010, to the relevant competent authority in accordance with the provisions adopted pursuant to Article 14(1).
If the data submitted are duly substantiated, the competent authority shall notify the Commission thereof by 30 June 2010 and the quantity of allowances to be issued, adjusted by the linear factor referred to in Article 9, shall be adjusted accordingly. In the case of installations emitting greenhouse gases other than CO2, the competent authority may notify a lower amount of emissions according to the emission reduction potential of those installations.
Article 10
Auctioning of allowances
From 2021 onwards, and without prejudice to a possible reduction pursuant to Article 10a(5a), the share of allowances to be auctioned shall be 57 %.
2 % of the total quantity of allowances between 2021 and 2030 shall be auctioned to establish a fund to improve energy efficiency and modernise the energy systems of certain Member States as set out in Article 10d (‘the Modernisation Fund’).
The total remaining quantity of allowances to be auctioned by Member States shall be distributed in accordance with paragraph 2.
The total quantity of allowances to be auctioned by each Member State shall be composed as follows:
►M9 90 % ◄ of the total quantity of allowances to be auctioned being distributed amongst Member States in shares that are identical to the share of verified emissions under the ►M9 EU ETS ◄ for 2005 or the average of the period from 2005 to 2007, whichever one is the highest, of the Member State concerned;
10 % of the total quantity of allowances to be auctioned being distributed amongst certain Member States for the purposes of solidarity, growth and interconnections within the Union, thereby increasing the amount of allowances that those Member States auction under point (a) by the percentages specified in Annex IIa.
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For the purposes of point (a), in respect of Member States which did not participate in the ►M9 EU ETS ◄ in 2005, their share shall be calculated using their verified emissions under the ►M9 EU ETS ◄ in 2007.
If necessary, the percentages referred to in point (b) shall be adapted in a proportional manner to ensure that the distribution is 10 %.
Member States shall determine the use of revenues generated from the auctioning of allowances. At least 50 % of the revenues generated from the auctioning of allowances referred to in paragraph 2, including all revenues from the auctioning referred to in paragraph 2, points (b) and (c), or the equivalent in financial value of these revenues, should be used for one or more of the following:
to reduce greenhouse gas emissions, including by contributing to the Global Energy Efficiency and Renewable Energy Fund and to the Adaptation Fund as made operational by the Poznan Conference on Climate Change (COP 14 and COP/MOP 4), to adapt to the impacts of climate change and to fund research and development as well as demonstration projects for reducing emissions and for adaptation to climate change, including participation in initiatives within the framework of the European Strategic Energy Technology Plan and the European Technology Platforms;
to develop renewable energies to meet the commitment of the Union to renewable energies, as well as to develop other technologies that contribute to the transition to a safe and sustainable low-carbon economy, and to help to meet the commitment of the Union to increase energy efficiency, at the levels agreed in relevant legislative acts;
measures to avoid deforestation and increase afforestation and reforestation in developing countries that have ratified the international agreement on climate change, to transfer technologies and to facilitate adaptation to the adverse effects of climate change in these countries;
forestry sequestration in the ►M9 Union ◄ ;
the environmentally safe capture and geological storage of CO2, in particular from solid fossil fuel power stations and a range of industrial sectors and subsectors, including in third countries;
to encourage a shift to low-emission and public forms of transport;
to finance research and development in energy efficiency and clean technologies in the sectors covered by this Directive;
measures intended to improve energy efficiency, district heating systems and insulation, or to provide financial support in order to address social aspects in lower- and middle-income households;
to cover administrative expenses of the management of the ►M9 EU ETS ◄ ;
to finance climate actions in vulnerable third countries, including the adaptation to the impacts of climate change;
to promote skill formation and reallocation of labour in order to contribute to a just transition to a low carbon economy, in particular in regions most affected by the transition of jobs, in close coordination with the social partners.
Member States shall be deemed to have fulfilled the provisions of this paragraph if they have in place and implement fiscal or financial support policies, including in particular in developing countries, or domestic regulatory policies, which leverage financial support, established for the purposes set out in the first subparagraph and which have a value equivalent to at least 50 % of the revenues generated from the auctioning of allowances referred to in paragraph 2, including all revenues from the auctioning referred to in paragraph 2, points (b) and (c).
Member States shall inform the Commission as to the use of revenues and the actions taken pursuant to this paragraph in their reports submitted under Decision No 280/2004/EC.
The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive concerning the timing, administration and other aspects of auctioning, in order to ensure that it is conducted in an open, transparent, harmonised and non-discriminatory manner. To that end, the process shall be predictable, in particular as regards the timing and sequencing of auctions and the estimated volumes of allowances to be made available.
Those delegated acts shall ensure that auctions are designed to ensure that:
operators, and in particular any small and medium-sized enterprises covered by the EU ETS, have full, fair and equitable access;
all participants have access to the same information at the same time and that participants do not undermine the operation of the auctions;
the organisation of, and participation in, the auctions is cost-efficient and undue administrative costs are avoided; and
access to allowances is granted to small emitters.
Member States shall report on the proper implementation of the auctioning rules for each auction, in particular with respect to fair and open access, transparency, price formation and technical and operational aspects. These reports shall be submitted within one month of the auction concerned and shall be published on the Commission's website.
Article 10a
Transitional ►M9 Union ◄ -wide rules for harmonised free allocation
The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive concerning the Union-wide and fully harmonised rules for the allocation of allowances referred to in paragraphs 4, 5, 7 and 19 of this Article.
The measures referred to in the first subparagraph shall, to the extent feasible, determine ►M9 Union ◄ -wide ex-ante benchmarks so as to ensure that allocation takes place in a manner that provides incentives for reductions in greenhouse gas emissions and energy efficient techniques, by taking account of the most efficient techniques, substitutes, alternative production processes, high efficiency cogeneration, efficient energy recovery of waste gases, use of biomass and capture and storage of CO2, where such facilities are available, and shall not provide incentives to increase emissions. No free allocation shall be made in respect of any electricity production, except for cases falling within Article 10c and electricity produced from waste gases.
For each sector and subsector, in principle, the benchmark shall be calculated for products rather than for inputs, in order to maximise greenhouse gas emissions reductions and energy efficiency savings throughout each production process of the sector or the subsector concerned.
In defining the principles for setting ex-ante benchmarks in individual sectors and subsectors, the Commission shall consult the relevant stakeholders, including the sectors and subsectors concerned.
The Commission shall, upon the approval by the ►M9 Union ◄ of an international agreement on climate change leading to mandatory reductions of greenhouse gas emissions comparable to those of the ►M9 Union ◄ , review those measures to provide that free allocation is only to take place where this is fully justified in the light of that agreement.
In defining the principles for setting ex-ante benchmarks in individual sectors or subsectors, the starting point shall be the average performance of the 10 % most efficient installations in a sector or subsector in the ►M9 Union ◄ in the years 2007-2008. The Commission shall consult the relevant stakeholders, including the sectors and subsectors concerned.
The ►M9 acts ◄ pursuant to Articles 14 and 15 shall provide for harmonised rules on monitoring, reporting and verification of production-related greenhouse gas emissions with a view to determining the ex-ante benchmarks.
The Commission shall adopt implementing acts for the purpose of determining the revised benchmark values for free allocation. Those acts shall be in accordance with the delegated acts adopted pursuant to paragraph 1 of this Article and shall comply with the following:
For the period from 2021 to 2025, the benchmark values shall be determined on the basis of information submitted pursuant to Article 11 for the years 2016 and 2017. On the basis of a comparison of those benchmark values with the benchmark values contained in Commission Decision 2011/278/EU ( 3 ), as adopted on 27 April 2011, the Commission shall determine the annual reduction rate for each benchmark, and shall apply it to the benchmark values applicable in the period from 2013 to 2020 in respect of each year between 2008 and 2023 to determine the benchmark values for the period from 2021 to 2025.
Where the annual reduction rate exceeds 1,6 % or is below 0,2 %, the benchmark values for the period from 2021 to 2025 shall be the benchmark values applicable in the period from 2013 to 2020 reduced by whichever of those two percentage rates is relevant, in respect of each year between 2008 and 2023.
For the period from 2026 to 2030, the benchmark values shall be determined in the same manner as set out in points (a) and (b) on the basis of information submitted pursuant to Article 11 for the years 2021 and 2022 and on the basis of applying the annual reduction rate in respect of each year between 2008 and 2028.
By way of derogation regarding the benchmark values for aromatics, hydrogen and syngas, these benchmark values shall be adjusted by the same percentage as the refineries benchmarks in order to preserve a level playing field for producers of those products.
The implementing acts referred to in the third subparagraph shall be adopted in accordance with the examination procedure referred to in Article 22a(2).
In order to promote efficient energy recovery from waste gases, for the period referred to in point (b) of the third subparagraph, the benchmark value for hot metal, which predominantly relates to waste gases, shall be updated with an annual reduction rate of 0,2 %.
Where less than 3 % of the total quantity of allowances is needed to increase the maximum amount available under paragraph 5:
Member States shall also seek to use no more than 25 % of the revenues generated from the auctioning of allowances for the financial measures referred to in the first subparagraph. Within three months of the end of each year, Member States that have such financial measures in place shall make available to the public, in an easily accessible form, the total amount of compensation provided per benefitting sector and subsector. As from 2018, in any year in which a Member State uses more than 25 % of the revenues generated from the auctioning of allowances for such purposes, it shall publish a report setting out the reasons for exceeding that amount. The report shall include relevant information on electricity prices for large industrial consumers benefiting from such financial measures, without prejudice to requirements regarding the protection of confidential information. The report shall also include information on whether due consideration has been given to other measures to sustainably lower indirect carbon costs in the medium to long term.
The Commission shall include in the report provided for in Article 10(5), inter alia, an assessment of the effects of such financial measures on the internal market and, where appropriate, recommend any measures that may be necessary pursuant to that assessment.
Those measures shall be such as to ensure that there is adequate protection against the risk of carbon leakage, based on ex-ante benchmarks for the indirect emissions of CO2 per unit of production. Those ex-ante benchmarks shall be calculated for a given sector or subsector as the product of the electricity consumption per unit of production corresponding to the most efficient available technologies and of the CO2 emissions of the relevant European electricity production mix.
►M9 Allowances from the maximum amount referred to in paragraph 5 of this Article which were not allocated for free by 2020 shall be set aside for new entrants, together with 200 million allowances placed in the market stability reserve pursuant to Article 1(3) of Decision (EU) 2015/1814. Of the allowances set aside, up to 200 million shall be returned to the market stability reserve at the end of the period from 2021 to 2030 if not allocated for that period.
From 2021, allowances that pursuant to paragraphs 19 and 20 are not allocated to installations shall be added to the amount of allowances set aside in accordance with the first sentence of the first subparagraph of this paragraph. ◄
Allocations shall be adjusted by the linear factor referred to in Article 9.
No free allocation shall be made in respect of any electricity production by new entrants.
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►M9 325 million allowances from the quantity which could otherwise be allocated for free pursuant to this Article, and 75 million allowances from the quantity which could otherwise be auctioned pursuant to Article 10, shall be made available to support innovation in low-carbon technologies and processes in sectors listed in Annex I, including environmentally safe carbon capture and utilisation (‘CCU’) that contributes substantially to mitigating climate change, as well as products substituting carbon intensive ones produced in sectors listed in Annex I, and to help stimulate the construction and operation of projects that aim at the environmentally safe capture and geological storage (‘CCS’) of CO2, as well as of innovative renewable energy and energy storage technologies; in geographically balanced locations within the territory of the Union (the ‘innovation fund’). Projects in all Member States, including small-scale projects, shall be eligible.
In addition, 50 million unallocated allowances from the market stability reserve shall supplement any remaining revenues from the 300 million allowances available in the period from 2013 to 2020 under Commission Decision 2010/670/EU ( 5 ), and shall be used in a timely manner for innovation support as referred to in the first subparagraph.
Projects shall be selected on the basis of objective and transparent criteria, taking into account, where relevant, the extent to which projects contribute to achieving emission reductions well below the benchmarks referred to in paragraph 2. Projects shall have the potential for widespread application or to significantly lower the costs of transitioning towards a low-carbon economy in the sectors concerned. Projects involving CCU shall deliver a net reduction in emissions and ensure avoidance or permanent storage of CO2. Technologies receiving support shall not yet be commercially available but shall represent breakthrough solutions or be sufficiently mature to be ready for demonstration at pre-commercial scale. Up to 60 % of the relevant costs of projects may be supported, out of which up to 40 % need not be dependent on verified avoidance of greenhouse gas emissions, provided that pre-determined milestones, taking into account the technology deployed, are attained.
The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive concerning rules on the operation of the innovation fund, including the selection procedure and criteria. ◄
Allowances shall be set aside for the projects that meet the criteria referred to in the third subparagraph. Support for these projects shall be given via Member States and shall be complementary to substantial co-financing by the operator of the installation. They could also be co-financed by the Member State concerned, as well as by other instruments. No project shall receive support via the mechanism under this paragraph that exceeds 15 % of the total number of allowances available for this purpose. These allowances shall be taken into account under paragraph 7.
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Article 10b
Transitional measures to support certain energy intensive industries in the event of carbon leakage
Sectors and subsectors in relation to which the product resulting from multiplying their intensity of trade with third countries by their emission intensity exceeds 0,15 may be included in the group referred to in paragraph 1, using data for the years from 2014 to 2016, on the basis of a qualitative assessment and of the following criteria:
the extent to which it is possible for individual installations in the sector or subsector concerned to reduce emission levels or electricity consumption;
current and projected market characteristics, including, where relevant, any common reference price;
profit margins as a potential indicator of long-run investment or relocation decisions, taking into account changes in costs of production relating to emission reductions.
Within three months of the publication referred to in the first subparagraph, the sectors and subsectors referred to in that subparagraph may apply to the Commission for either a qualitative assessment of their carbon leakage exposure at a 4-digit level (NACE-4 code) or an assessment on the basis of the classification of goods used for statistics on industrial production in the Union at an 8-digit level (Prodcom). To that end, sectors and subsectors shall submit duly substantiated, complete and independently verified data to enable the Commission to carry out the assessment together with the application.
Where a sector or subsector chooses to be assessed at a 4-digit level (NACE-4 code), it may be included in the group referred to in paragraph 1 on the basis of the criteria referred to in points (a), (b) and (c) of paragraph 2. Where a sector or subsector chooses to be assessed at an 8-digit level (Prodcom), it shall be included in the group referred to in paragraph 1 provided that, at that level, the threshold of 0,2 referred to in paragraph 1 is exceeded.
Sectors and subsectors for which free allocation is calculated on the basis of the benchmark values referred to in the fourth subparagraph of Article 10a(2) may also request to be assessed in accordance with the third subparagraph of this paragraph.
By way of derogation from paragraphs 1 and 2, a Member State may request, by 30 June 2018, that a sector or subsector listed in the Annex to Commission Decision 2014/746/EU ( 6 ) in respect of classifications at a 6-digit or an 8-digit level (Prodcom) be considered to be included in the group referred to in paragraph 1. Any such request shall only be considered where the requesting Member State establishes that the application of that derogation is justified on the basis of duly substantiated, complete, verified and audited data for the five most recent years provided by the sector or subsector concerned, and includes all relevant information with its request. On the basis of those data, the sector or subsector concerned shall be included in respect of those classifications where, within a heterogeneous 4-digit level (NACE-4 code), it is shown that it has a substantially higher trade and emission intensity at a 6-digit or an 8-digit level (Prodcom), exceeding the threshold set out in paragraph 1.
Article 10c
Option for transitional free allocation for the modernisation of the energy sector
The Member State concerned shall organise a competitive bidding process, to take place in one or more rounds between 2021 and 2030, for projects involving a total amount of investment exceeding EUR 12,5 million, in order to select the investments to be financed with free allocation. That competitive bidding process shall:
comply with the principles of transparency, non-discrimination, equal treatment and sound financial management;
ensure that only projects which contribute to the diversification of their energy mix and sources of supply, the necessary restructuring, environmental upgrading and retrofitting of the infrastructure, clean technologies, such as renewable energy technologies, or modernisation of the energy production sector, such as efficient and sustainable district heating, and of the transmission and distribution sector, are eligible to bid;
define clear, objective, transparent and non-discriminatory selection criteria for the ranking of projects, so as to ensure that only projects are selected which:
on the basis of a cost-benefit analysis, ensure a net positive gain in terms of emission reduction and realise a pre-determined significant level of CO2 reductions taking into account the size of the project;
are additional, clearly respond to replacement and modernisation needs and do not supply a market-driven increase in energy demand;
offer the best value for money; and
do not contribute to or improve the financial viability of highly emission-intensive electricity generation or increase dependency on emission-intensive fossil fuels.
By way of derogation from Article 10(1) and without prejudice to the last sentence of paragraph 1 of this Article, in the event that an investment selected through the competitive bidding process is cancelled or the intended performance is not reached, the earmarked allowances may be used through a single additional round of the competitive bidding process at the earliest one year thereafter to finance other investments.
By 30 June 2019, any Member State intending to make use of optional transitional free allocation for the modernisation of the energy sector shall publish a detailed national framework setting out the competitive bidding process, including the planned number of rounds referred to in the first subparagraph, and the selection criteria, for public comment.
Where investments with a value of less than EUR 12,5 million are to be supported with free allocation and are not selected through the competitive bidding process referred to in this paragraph, the Member State shall select projects based on objective and transparent criteria. The results of this selection process shall be published for public comment. On this basis, the Member State concerned shall, by 30 June 2019, establish, publish and submit to the Commission a list of investments. Where more than one investment is carried out within the same installation, they shall be assessed as a whole to establish whether or not the value threshold of EUR 12,5 million is exceeded, unless those investments are, independently, technically or financially viable.
Any allowances not allocated under this Article by 2020 may be allocated over the period from 2021 to 2030 to investments selected through the competitive bidding process referred to in paragraph 2, unless the Member State concerned informs the Commission by 30 September 2019 of its intention not to allocate some or all of those allowances over the period from 2021 to 2030, and of the amount of allowances to be auctioned instead in 2020. Where such allowances are allocated over the period from 2021 to 2030, a corresponding amount of allowances shall be taken into account for the application of the 60 % limit set out in the first subparagraph of this paragraph.
Article 10d
Modernisation Fund
The investments supported shall be consistent with the aims of this Directive, as well as the objectives of the Union's 2030 climate and energy policy framework and the long-term objectives as expressed in the Paris Agreement. No support from the Modernisation Fund shall be provided to energy generation facilities that use solid fossil fuels, other than efficient and sustainable district heating in Member States with a GDP per capita at market prices below 30 % of the Union average in 2013, provided that an amount of allowances of at least an equivalent value is used for investments under Article 10c that do not involve solid fossil fuels.
The investment committee shall operate in a transparent manner. The composition of the investment committee and the curricula vitae and declarations of interests of its members shall be made available to the public and, where necessary, updated.
Where an investment in the modernisation of energy systems, which is proposed to be financed from the Modernisation Fund, does not fall into the areas listed in paragraph 2, the investment committee shall assess the technical and financial viability of that investment, including the emission reductions it achieves, and issue a recommendation on financing the investment from the Modernisation Fund. The investment committee shall ensure that any investment relating to district heating achieves a substantial improvement in energy efficiency and emission reductions. That recommendation may include suggestions regarding appropriate financing instruments. Up to 70 % of the relevant costs of an investment which does not fall into the areas listed in paragraph 2 may be supported with resources from the Modernisation Fund provided that the remaining costs are financed by private legal entities.
If the representative of the EIB does not endorse financing an investment, a recommendation shall only be adopted if a majority of two-thirds of all members vote in favour. The representative of the Member State in which the investment is to take place and the representative of the EIB shall not be entitled to cast a vote in this case. This subparagraph shall not apply to small-scale projects funded through loans provided by a national promotional bank or through grants contributing to the implementation of a national programme serving specific objectives in line with the objectives of the Modernisation Fund, provided that not more than 10 % of the Member States' share set out in Annex IIb is used under the programme.
The beneficiary Member States shall report annually to the Commission on investments financed by the Modernisation Fund. The report shall be made public and include:
information on the investments financed per beneficiary Member State;
an assessment of the added value, in terms of energy efficiency or modernisation of the energy system, achieved through the investment.
Article 10e
Recovery and Resilience Facility
Article 11
National implementation measures
A list of installations covered by this Directive for the five years beginning on 1 January 2021 shall be submitted by 30 September 2019, and lists for each subsequent period of five years shall be submitted every five years thereafter. Each list shall include information on production activity, transfers of heat and gases, electricity production and emissions at sub-installation level over the five calendar years preceding its submission. Free allocations shall only be given to installations where such information is provided.
CHAPTER IV
PROVISIONS APPLYING TO AVIATION AND STATIONARY INSTALLATIONS
Article 11a
Use of CERs and ERUs from project activities in the ►M9 EU ETS ◄ before the entry into force of an international agreement on climate change
To the extent that the levels of CER and ERU use, allowed to operators or aircraft operators by Member States for the period from 2008 to 2012, have not been used up or an entitlement to use credits is granted under paragraph 8, operators may request the competent authority to issue allowances to them valid from 2013 onwards in exchange for CERs and ERUs issued in respect of emission reductions up until 2012 from project types which were eligible for use in the ►M9 EU ETS ◄ during the period from 2008 to 2012.
Until 31 March 2015, the competent authority shall make such an exchange on request.
To the extent that the levels of CER and ERU use, allowed to operators or aircraft operators by Member States for the period from 2008 to 2012, have not been used up or an entitlement to use credits is granted under paragraph 8, competent authorities shall allow operators to exchange CERs and ERUs from projects that were registered before 2013 issued in respect of emission reductions from 2013 onwards for allowances valid from 2013 onwards.
The first subparagraph shall apply to CERs and ERUs for all project types which were eligible for use in the ►M9 EU ETS ◄ during the period from 2008 to 2012.
To the extent that the levels of CER and ERU use, allowed to operators or aircraft operators by Member States for the period from 2008 to 2012, have not been used up or an entitlement to use credits is granted under paragraph 8, competent authorities shall allow operators to exchange CERs issued in respect of emission reductions from 2013 onwards for allowances from new projects started from 2013 onwards in LDCs.
The first subparagraph shall apply to CERs for all project types which were eligible for use in the ►M9 EU ETS ◄ during the period from 2008 to 2012, until those countries have ratified a relevant agreement with the ►M9 Union ◄ or until 2020, whichever is the earlier.
▼M9 —————
Article 11b
Project activities
The ►M9 Union ◄ and its Member States shall only authorise project activities where all project participants have headquarters either in a country that has concluded the international agreement relating to such projects or in a country or sub-federal or regional entity which is linked to the ►M9 EU ETS ◄ pursuant to Article 25.
▼M9 —————
Article 12
Transfer, surrender and cancellation of allowances
Member States shall ensure that allowances can be transferred between:
persons within the ►M9 Union ◄ ;
persons within the ►M9 Union ◄ and persons in third countries, where such allowances are recognised in accordance with the procedure referred to in Article 25 without restrictions other than those contained in, or adopted pursuant to, this Directive.
By 30 November 2022, Member States shall notify aircraft operators that, in respect of the year 2021, their offsetting requirements within the meaning of paragraph 3.2.1 of ICAO’s International Standards and Recommended Practices on Environmental Protection for Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA SARPs) amount to zero. Member States shall notify aircraft operators that fulfil the following conditions:
the aircraft operators hold an air operator certificate issued by a Member State or are registered in a Member State, including in the outermost regions, dependencies and territories of that Member State; and
they produce annual CO2 emissions greater than 10 000 tonnes from the use of aeroplanes with a maximum certified take-off mass greater than 5 700 kg conducting flights covered by Annex I to this Directive and by Article 2(3) of Commission Delegated Regulation (EU) 2019/1603 ( 12 ), other than those departing and arriving in the same Member State, including the outermost regions of that Member State, from 1 January 2021.
For the purposes of the first subparagraph, point (b), CO2 emissions from the following types of flights shall not be taken into account:
state flights;
humanitarian flights;
medical flights;
military flights;
firefighting flights;
flights preceding or following a humanitarian, medical or firefighting flight, provided that such flights were conducted with the same aircraft and were required to accomplish the related humanitarian, medical or firefighting activities or to reposition the aircraft after those activities for its next activity.
Article 13
Validity of allowances
Allowances issued from 1 January 2013 onwards shall be valid indefinitely. Allowances issued from 1 January 2021 onwards shall include an indication showing in which ten-year period beginning from 1 January 2021 they were issued, and be valid for emissions from the first year of that period onwards.
Article 14
Monitoring and reporting of emissions
Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 22a(2).
The ►M9 acts ◄ referred to in paragraph 1 shall take into account the most accurate and up-to-date scientific evidence available, in particular from the IPCC, and may also specify requirements for operators to report on emissions associated with the production of goods produced by energy intensive industries which may be subject to international competition. These ►M9 acts ◄ may also specify requirements for this information to be verified independently.
Those requirements may include reporting on levels of emissions from electricity generation covered by the ►M9 EU ETS ◄ associated with the production of such goods.
Article 15
Verification and accreditation
Member States shall ensure that the reports submitted by operators and aircraft operators pursuant to Article 14(3) are verified in accordance with the criteria set out in Annex V and any detailed provisions adopted by the Commission in accordance with this Article, and that the competent authority is informed thereof.
Member States shall ensure that an operator or aircraft operator whose report has not been verified as satisfactory in accordance with the criteria set out in Annex V and any detailed provisions adopted by the Commission in accordance with this Article by 31 March each year for emissions during the preceding year cannot make further transfers of allowances until a report from that operator or aircraft operator has been verified as satisfactory.
The Commission shall adopt implementing acts concerning the verification of emission reports based on the principles set out in Annex V and for the accreditation and supervision of verifiers. The Commission may also adopt implementing acts for the verification of reports submitted by aircraft operators pursuant to Article 14(3) and applications under Articles 3e and 3f, including the verification procedures to be used by verifiers. It shall specify conditions for the accreditation and withdrawal of accreditation, for mutual recognition and peer evaluation of accreditation bodies, as appropriate.
Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 22a(2).
Article 15a
Disclosure of information and professional secrecy
Member States and the Commission shall ensure that all decisions and reports relating to the quantity and allocation of allowances and to the monitoring, reporting and verification of emissions are immediately disclosed in an orderly manner ensuring non-discriminatory access.
Information covered by professional secrecy may not be disclosed to any other person or authority except by virtue of the applicable laws, regulations or administrative provisions.
Article 16
Penalties
Any request by an administering Member State under paragraph 5 shall include:
evidence that the aircraft operator has not complied with its obligations under this Directive;
details of the enforcement action which has been taken by that Member State;
a justification for the imposition of an operating ban at ►M9 Union ◄ level; and
a recommendation for the scope of an operating ban at ►M9 Union ◄ level and any conditions that should be applied.
Article 17
Access to information
Decisions relating to the allocation of allowances, information on project activities in which a Member State participates or authorises private or public entities to participate, and the reports of emissions required under the greenhouse gas emissions permit and held by the competent authority, shall be made available to the public in accordance with Directive 2003/4/EC.
Article 18
Competent authority
Member States shall make the appropriate administrative arrangements, including the designation of the appropriate competent authority or authorities, for the implementation of the rules of this Directive. Where more than one competent authority is designated, the work of these authorities undertaken pursuant to this Directive must be coordinated.
Member States shall in particular ensure coordination between their designated focal point for approving project activities pursuant to Article 6 (1)(a) of the Kyoto Protocol and their designated national authority for the implementation of Article 12 of the Kyoto Protocol respectively designated in accordance with subsequent decisions adopted under the UNFCCC or the Kyoto Protocol.
Article 18a
Administering Member State
The administering Member State in respect of an aircraft operator shall be:
in the case of an aircraft operator with a valid operating licence granted by a Member State in accordance with the provisions of Council Regulation (EEC) No 2407/92 of 23 July 1992 on licensing of air carriers ( 13 ), the Member State which granted the operating licence in respect of that aircraft operator; and
in all other cases, the Member State with the greatest estimated attributed aviation emissions from flights performed by that aircraft operator in the base year.
Based on the best available information, the Commission shall:
before 1 February 2009, publish a list of aircraft operators which performed an aviation activity listed in Annex I on or after 1 January 2006 specifying the administering Member State for each aircraft operator in accordance with paragraph 1; and
before 1 February of each subsequent year, update the list to include aircraft operators which have subsequently performed an aviation activity listed in Annex I.
Article 18b
Assistance from Eurocontrol
For the purposes of carrying out its obligations under Articles 3c(4) and 18a, the Commission may request the assistance of Eurocontrol or another relevant organisation and may conclude to that effect any appropriate agreements with those organisations.
Article 19
Registries
Allowances issued from 1 January 2012 onwards shall be held in the ►M9 Union ◄ registry for the execution of processes pertaining to the maintenance of the holding accounts opened in the Member State and the allocation, surrender and cancellation of allowances under the Commission ►M9 Acts ◄ referred to in paragraph 3.
Each Member State shall be able to fulfil the execution of authorised operations under the UNFCCC or the Kyoto Protocol.
Article 20
Central Administrator
Article 21
Reporting by Member States
Article 21a
Support of capacity-building activities
In accordance with the UNFCCC, the Kyoto Protocol and any subsequent decision adopted for their implementation, the Commission and the Member States shall endeavour to support capacity-building activities in developing countries and countries with economies in transition in order to help them take full advantage of JI and the CDM in a manner that supports their sustainable development strategies and to facilitate the engagement of entities in JI and CDM project development and implementation.
Article 22
Amendments to the Annexes
The Commission is empowered to adopt delegated acts in accordance with Article 23 to amend, where appropriate, the Annexes to this Directive, with the exception of Annexes I, IIa and IIb, in the light of the reports provided for in Article 21 and of the experience of the application of this Directive. Annexes IV and V may be amended in order to improve the monitoring, reporting and verification of emissions.
Article 22a
Committee procedure
Where the committee delivers no opinion, the Commission shall not adopt the draft implementing act and the third subparagraph of Article 5(4) of Regulation (EU) No 182/2011 shall apply.
Article 23
Exercise of the delegation
Article 24
Procedures for unilateral inclusion of additional activities and gases
On the initiative of the Commission or at the request of a Member State, these ►M9 acts ◄ may be adopted on the monitoring of, and reporting on, emissions concerning activities, installations and greenhouse gases which are not listed as a combination in Annex I, if that monitoring and reporting can be carried out with sufficient accuracy.
The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive to this effect.
Article 24a
Harmonised rules for projects that reduce emissions
In addition to the inclusions provided for in Article 24, the Commission may adopt measures for issuing allowances or credits in respect of projects administered by Member States that reduce greenhouse gas emissions not covered by the EU ETS.
Such measures shall be consistent with acts adopted pursuant to former Article 11b(7) as in force before 8 April 2018. The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive by setting out the procedure to be followed.
Any such measures shall not result in the double-counting of emission reductions nor impede the undertaking of other policy measures to reduce emissions not covered by the ►M9 EU ETS ◄ . Measures shall only be adopted where inclusion is not possible in accordance with Article 24, and the next review of the ►M9 EU ETS ◄ shall consider harmonising the coverage of those emissions across the ►M9 Union ◄ .
▼M9 —————
A Member State can refuse to issue allowances or credits in respect of certain types of projects that reduce greenhouse gas emissions on its own territory.
Such projects will be executed on the basis of the agreement of the Member State in which the project takes place.
Article 25
Links with other greenhouse gas emissions trading ►M9 systems ◄
▼M9 —————
Article 25a
Third country measures to reduce the climate change impact of aviation
The Commission is empowered to adopt delegated acts in accordance with Article 23 to amend Annex I to this Directive to provide for flights arriving from the third country concerned to be excluded from the aviation activities listed in Annex I or to provide for any other amendments to the aviation activities listed in Annex I, except in relation to scope, which are required by an agreement concluded pursuant to Article 218 of the Treaty on the Functioning of the European Union. ◄
The Commission may propose to the European Parliament and the Council any other amendments to this Directive.
The Commission may also, where appropriate, make recommendations to the Council in accordance with Article 300(1) of the Treaty to open negotiations with a view to concluding an agreement with the third country concerned.
Article 26
Amendment of Directive 96/61/EC
In Article 9(3) of Directive 96/61/EC the following subparagraphs shall be added:
‘Where emissions of a greenhouse gas from an installation are specified in Annex I to Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC ( *1 ) in relation to an activity carried out in that installation, the permit shall not include an emission limit value for direct emissions of that gas unless it is necessary to ensure that no significant local pollution is caused.
For activities listed in Annex I to Directive 2003/87/EC, Member States may choose not to impose requirements relating to energy efficiency in respect of combustion units or other units emitting carbon dioxide on the site.
Where necessary, the competent authorities shall amend the permit as appropriate.
The three preceding subparagraphs shall not apply to installations temporarily excluded from the scheme for greenhouse gas emission allowance trading within the Community in accordance with Article 27 of Directive 2003/87/EC.
Article 27
Exclusion of small installations subject to equivalent measures
Following consultation with the operator, Member States may exclude from the ►M9 EU ETS ◄ installations which have reported to the competent authority emissions of less than 25 000 tonnes of carbon dioxide equivalent and, where they carry out combustion activities, have a rated thermal input below 35 MW, excluding emissions from biomass, in each of the three years preceding the notification under point (a), and which are subject to measures that will achieve an equivalent contribution to emission reductions, if the Member State concerned complies with the following conditions:
it notifies the Commission of each such installation, specifying the equivalent measures applying to that installation that will achieve an equivalent contribution to emission reductions that are in place, before the list of installations pursuant to Article 11(1) has to be submitted and at the latest when this list is submitted to the Commission;
it confirms that monitoring arrangements are in place to assess whether any installation emits 25 000 tonnes or more of carbon dioxide equivalent, excluding emissions from biomass, in any one calendar year. Member States may allow simplified monitoring, reporting and verification measures for installations with average annual verified emissions between 2008 and 2010 which are below 5 000 tonnes a year, in accordance with Article 14;
it confirms that if any installation emits 25 000 tonnes or more of carbon dioxide equivalent, excluding emissions from biomass, in any one calendar year or the measures applying to that installation that will achieve an equivalent contribution to emission reductions are no longer in place, the installation will be reintroduced into the ►M9 EU ETS ◄ ;
it publishes the information referred to in points (a), (b) and (c) for public comment.
Hospitals may also be excluded if they undertake equivalent measures.
If, following a period of three months from the date of notification for public comment, the Commission does not object within a further period of six months, the exclusion shall be deemed approved.
Following the surrender of allowances in respect of the period during which the installation is in the ►M9 EU ETS ◄ , the installation shall be excluded and the Member State shall no longer issue free allowances to the installation pursuant to Article 10a.
When an installation is reintroduced into the ►M9 EU ETS ◄ pursuant to paragraph 1(c), any allowances issued pursuant to Article 10a shall be granted starting with the year of the reintroduction. Allowances issued to these installations shall be deducted from the quantity to be auctioned pursuant to Article 10(2) by the Member State in which the installation is situated.
Any such installation shall stay in the EU ETS for the rest of the period referred to in Article 11(1) during which it was reintroduced.
Article 27a
Optional exclusion of installations emitting less than 2 500 tonnes
Member States may exclude from the EU ETS installations that have reported to the competent authority of the Member State concerned emissions of less than 2 500 tonnes of carbon dioxide equivalent, disregarding emissions from biomass, in each of the three years preceding the notification under point (a), provided that the Member State concerned:
notifies the Commission of each such installation before the list of installations pursuant to Article 11(1) is to be submitted or at the latest when that list is submitted to the Commission;
confirms that simplified monitoring arrangements are in place to assess whether any installation emits 2 500 tonnes or more of carbon dioxide equivalent, disregarding emissions from biomass, in any one calendar year;
confirms that if any installation emits 2 500 tonnes or more of carbon dioxide equivalent, disregarding emissions from biomass, in any one calendar year, the installation will be reintroduced into the EU ETS; and
makes the information referred to in points (a), (b) and (c) available to the public.
Article 28
Adjustments applicable upon the approval by the ►M9 Union ◄ of an international agreement on climate change
Within three months of the signature by the ►M9 Union ◄ of an international agreement on climate change leading, by 2020, to mandatory reductions of greenhouse gas emissions exceeding 20 % compared to 1990 levels, as reflected in the 30 % reduction commitment as endorsed by the European Council of March 2007, the Commission shall submit a report assessing, in particular, the following elements:
the nature of the measures agreed upon in the framework of the international negotiations as well as the commitments made by other developed countries to comparable emission reductions to those of the ►M9 Union ◄ and the commitments made by economically more advanced developing countries to contributing adequately according to their responsibilities and respective capabilities;
the implications of the international agreement on climate change, and consequently, options required at ►M9 Union ◄ level, in order to move to the more ambitious 30 % reduction target in a balanced, transparent and equitable way, taking into account work under the Kyoto Protocol's first commitment period;
the ►M9 Union ◄ manufacturing industries' competitiveness in the context of carbon leakage risks;
the impact of the international agreement on climate change on other ►M9 Union ◄ economic sectors;
the impact on the ►M9 Union ◄ agriculture sector, including carbon leakage risks;
the appropriate modalities for including emissions and removals related to land use, land use change and forestry in the ►M9 Union ◄ ;
afforestation, reforestation, avoided deforestation and forest degradation in third countries in the event of the establishment of any internationally recognised system in this context;
On the basis of the report referred to in paragraph 1, the Commission shall, as appropriate, submit a legislative proposal to the European Parliament and to the Council amending this Directive pursuant to paragraph 1, with a view to the amending Directive entering into force upon the approval by the ►M9 Union ◄ of the international agreement on climate change and in view of the emission reduction commitment to be implemented under that agreement.
The proposal shall be based upon the principles of transparency, economic efficiency and cost-effectiveness, as well as fairness and solidarity in the distribution of efforts between Member States.
Article 28a
Derogations applicable in advance of the implementation of the ICAO's global market-based measure
By way of derogation from Articles 12(2a), 14(3) and Article 16, Member States shall consider the requirements set out in those provisions to be satisfied and shall take no action against aircraft operators in respect of:
all emissions from flights to and from aerodromes located in countries outside the EEA in each calendar year from 1 January 2013 to 31 December 2023, subject to the review referred to in Article 28b;
all emissions from flights between an aerodrome located in an outermost region within the meaning of Article 349 of the Treaty on the Functioning of the European Union and an aerodrome located in another region of the EEA in each calendar year from 1 January 2013 to 31 December 2023, subject to the review referred to in Article 28b.
▼M8 —————
For the purposes of Articles 11a, 12 and 14, the verified emissions from flights other than those referred to in the first subparagraph shall be considered to be the verified emissions of the aircraft operator.
By way of derogation from Article 3f(8), allowances that are not allocated from the special reserve shall be cancelled.
From 1 January 2021, the number of allowances allocated to aircraft operators shall be subject to the application of the linear factor referred to in Article 9, subject to the review referred to in Article 28b.
As regards activity in the period from 1 January 2017 to 31 December 2023, Member States shall, before 1 September 2018, publish the number of aviation allowances allocated to each aircraft operator.
▼M8 —————
Article 28b
Reporting and review by the Commission concerning the implementation of the ICAO's global market-based measure
In line with the UNFCCC's global stocktake, the Commission shall also report on efforts to meet the aviation sector's aspirational long-term emissions reduction goal of halving aviation CO2 emissions relative to 2005 levels by 2050.
Article 28c
Provisions for monitoring, reporting and verification for the purpose of the global market-based measure
The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive concerning the appropriate monitoring, reporting and verification of emissions for the purpose of implementing the ICAO's global market-based measure on all routes covered by it. Those delegated acts shall be based on the relevant instruments adopted in the ICAO, shall avoid any distortion of competition and be consistent with the principles contained in the acts referred to in Article 14(1), and shall ensure that the emissions reports submitted are verified in accordance with the verification principles and criteria laid down in Article 15.
Article 29
Report to ensure the better functioning of the carbon market
If, on the basis of the regular reports on the carbon market referred to in Article 10(5), the Commission has evidence that the carbon market is not functioning properly, it shall submit a report to the European Parliament and to the Council. The report may be accompanied, if appropriate, by proposals aiming at increasing transparency of the carbon market and addressing measures to improve its functioning.
Article 29a
Measures in the event of excessive price fluctuations
If the price evolution referred to in paragraph 1 does not correspond to changing market fundamentals, one of the following measures may be adopted, taking into account the degree of price evolution:
a measure which allows Member States to bring forward the auctioning of a part of the quantity to be auctioned;
a measure which allows Member States to auction up to 25 % of the remaining allowances in the new entrants reserve.
Those measures shall be adopted in accordance with the management procedure referred to in Article 23(4).
Article 30
Review in the light of the implementation of the Paris Agreement and the development of carbon markets in other major economies
CHAPTER V
FINAL PROVISIONS
Article 31
Implementation
When Member States adopt these measures, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. The methods of making such reference shall be laid down by Member States.
Article 32
Entry into force
This Directive shall enter into force on the day of its publication in the Official Journal of the European Union.
Article 33
Addressees
This Directive is addressed to the Member States.
ANNEX I
CATEGORIES OF ACTIVITIES TO WHICH THIS DIRECTIVE APPLIES
|
1. |
Installations or parts of installations used for research, development and testing of new products and processes and installations exclusively using biomass are not covered by this Directive. |
|
2. |
The thresholds values given below generally refer to production capacities or outputs. Where several activities falling under the same category are carried out in the same installation, the capacities of such activities are added together. |
|
3. |
When the total rated thermal input of an installation is calculated in order to decide upon its inclusion in the ►M9 EU ETS ◄ , the rated thermal inputs of all technical units which are part of it, in which fuels are combusted within the installation, are added together. These units could include all types of boilers, burners, turbines, heaters, furnaces, incinerators, calciners, kilns, ovens, dryers, engines, fuel cells, chemical looping combustion units, flares, and thermal or catalytic post-combustion units. Units with a rated thermal input under 3 MW and units which use exclusively biomass shall not be taken into account for the purposes of this calculation. ‘Units using exclusively biomass’ includes units which use fossil fuels only during start-up or shut-down of the unit. |
|
4. |
If a unit serves an activity for which the threshold is not expressed as total rated thermal input, the threshold of this activity shall take precedence for the decision about the inclusion in the ►M9 EU ETS ◄ . |
|
5. |
When the capacity threshold of any activity in this Annex is found to be exceeded in an installation, all units in which fuels are combusted, other than units for the incineration of hazardous or municipal waste, shall be included in the greenhouse gas emission permit. |
|
6. |
From 1 January 2012 all flights which arrive at or depart from an aerodrome situated in the territory of a Member State to which the Treaty applies shall be included.
|
ANNEX II
GREENHOUSE GASES REFERRED TO IN ARTICLES 3 AND 30
Carbon dioxide (CO2)
Methane (CH4)
Nitrous Oxide (N2O)
Hydrofluorocarbons (HFCs)
Perfluorocarbons (PFCs)
Sulphur Hexafluoride (SF6)
ANNEX IIa
Increases in the percentage of allowances to be auctioned by Member States pursuant to Article 10(2)(a), for the purpose of ►M9 Union ◄ solidarity and growth in order to reduce emissions and adapt to the effects of climate change
|
|
Member State share |
|
▼M9 ————— |
|
|
Bulgaria |
53 % |
|
Czech Republic |
31 % |
|
Estonia |
42 % |
|
Greece |
17 % |
|
Spain |
13 % |
|
Croatia |
26 % |
|
▼M9 ————— |
|
|
Cyprus |
20 % |
|
Latvia |
56 % |
|
Lithuania |
46 % |
|
▼M9 ————— |
|
|
Hungary |
28 % |
|
Malta |
23 % |
|
Poland |
39 % |
|
Portugal |
16 % |
|
Romania |
53 % |
|
Slovenia |
20 % |
|
Slovakia |
41 % |
|
▼M9 ————— |
|
ANNEX IIb
DISTRIBUTION OF FUNDS FROM THE MODERNISATION FUND UNTIL 31 DECEMBER 2030
|
|
Share of Modernisation Fund |
|
Bulgaria |
5,84 % |
|
Czech Republic |
15,59 % |
|
Estonia |
2,78 % |
|
Croatia |
3,14 % |
|
Latvia |
1,44 % |
|
Lithuania |
2,57 % |
|
Hungary |
7,12 % |
|
Poland |
43,41 % |
|
Romania |
11,98 % |
|
Slovakia |
6,13 % |
▼M4 —————
ANNEX IV
PRINCIPLES FOR MONITORING AND REPORTING REFERRED TO IN ARTICLE 14(1)
PART A — Monitoring and reporting of emissions from stationary installations
Monitoring of carbon dioxide emissions
Emissions shall be monitored either by calculation or on the basis of measurement.
Calculation
Calculations of emissions shall be performed using the formula:
Activity data × Emission factor × Oxidation factor
Activity data (fuel used, production rate etc.) shall be monitored on the basis of supply data or measurement.
Accepted emission factors shall be used. Activity-specific emission factors are acceptable for all fuels. Default factors are acceptable for all fuels except non-commercial ones (waste fuels such as tyres and industrial process gases). Seam-specific defaults for coal, and EU-specific or producer country-specific defaults for natural gas shall be further elaborated. IPCC default values are acceptable for refinery products. The emission factor for biomass shall be zero.
If the emission factor does not take account of the fact that some of the carbon is not oxidised, then an additional oxidation factor shall be used. If activity-specific emission factors have been calculated and already take oxidation into account, then an oxidation factor need not be applied.
Default oxidation factors developed pursuant to Directive 96/61/EC shall be used, unless the operator can demonstrate that activity-specific factors are more accurate.
A separate calculation shall be made for each activity, installation and for each fuel.
Measurement
Measurement of emissions shall use standardised or accepted methods, and shall be corroborated by a supporting calculation of emissions.
Monitoring of emissions of other greenhouse gases
Standardised or accepted methods, developed by the Commission in collaboration with all relevant stakeholders and adopted pursuant to Article 14(1), shall be used.
Reporting of emissions
Each operator shall include the following information in the report for an installation:
Data identifying the installation, including:
For each Annex I activity carried out on the site for which emissions are calculated:
For each Annex I activity carried out on the site for which emissions are measured:
For emissions from combustion, the report shall also include the oxidation factor, unless oxidation has already been taken into account in the development of an activity-specific emission factor.
Member States shall take measures to coordinate reporting requirements with any existing reporting requirements in order to minimise the reporting burden on businesses.
PART B — Monitoring and reporting of emissions from aviation activities
Monitoring of carbon dioxide emissions
Emissions shall be monitored by calculation. Emissions shall be calculated using the formula:
Fuel consumption × emission factor
Fuel consumption shall include fuel consumed by the auxiliary power unit. Actual fuel consumption for each flight shall be used wherever possible and shall be calculated using the formula:
Amount of fuel contained in aircraft tanks once fuel uplift for the flight is complete – amount of fuel contained in aircraft tanks once fuel uplift for subsequent flight is complete + fuel uplift for that subsequent flight.
If actual fuel consumption data are not available, a standardised tiered method shall be used to estimate fuel consumption data based on best available information.
Default IPCC emission factors, taken from the 2006 IPCC Inventory Guidelines or subsequent updates of these Guidelines, shall be used unless activity-specific emission factors identified by independent accredited laboratories using accepted analytical methods are more accurate. The emission factor for biomass shall be zero.
A separate calculation shall be made for each flight and for each fuel.
Reporting of emissions
Each aircraft operator shall include the following information in its report under Article 14(3):
Data identifying the aircraft operator, including:
For each type of fuel for which emissions are calculated:
Monitoring of tonne-kilometre data for the purpose of Articles 3e and 3f
For the purpose of applying for an allocation of allowances in accordance with Article 3e(1) or Article 3f(2), the amount of aviation activity shall be calculated in tonne-kilometres using the following formula:
tonne-kilometres = distance × payload
where:
‘distance’ means the great circle distance between the aerodrome of departure and the aerodrome of arrival plus an additional fixed factor of 95 km; and
‘payload’ means the total mass of freight, mail and passengers carried.
For the purposes of calculating the payload:
Reporting of tonne-kilometre data for the purpose of Articles 3e and 3f
Each aircraft operator shall include the following information in its application under Article 3e(1) or Article 3f(2):
Data identifying the aircraft operator, including:
Tonne-kilometre data:
ANNEX V
CRITERIA FOR VERIFICATION REFERRED TO IN ARTICLE 15
PART A — Verification of emissions from stationary installations
General Principles
1. Emissions from each activity listed in Annex I shall be subject to verification.
2. The verification process shall include consideration of the report pursuant to Article 14(3) and of monitoring during the preceding year. It shall address the reliability, credibility and accuracy of monitoring systems and the reported data and information relating to emissions, in particular:
the reported activity data and related measurements and calculations;
the choice and the employment of emission factors;
the calculations leading to the determination of the overall emissions; and
if measurement is used, the appropriateness of the choice and the employment of measuring methods.
3. Reported emissions may only be validated if reliable and credible data and information allow the emissions to be determined with a high degree of certainty. A high degree of certainty requires the operator to show that:
the reported data is free of inconsistencies;
the collection of the data has been carried out in accordance with the applicable scientific standards; and
the relevant records of the installation are complete and consistent.
4. The verifier shall be given access to all sites and information in relation to the subject of the verification.
5. The verifier shall take into account whether the installation is registered under the ►M9 Union ◄ eco-management and audit scheme (EMAS).
Methodology
Strategic analysis
6. The verification shall be based on a strategic analysis of all the activities carried out in the installation. This requires the verifier to have an overview of all the activities and their significance for emissions.
Process analysis
7. The verification of the information submitted shall, where appropriate, be carried out on the site of the installation. The verifier shall use spot-checks to determine the reliability of the reported data and information.
Risk analysis
8. The verifier shall submit all the sources of emissions in the installation to an evaluation with regard to the reliability of the data of each source contributing to the overall emissions of the installation.
9. On the basis of this analysis the verifier shall explicitly identify those sources with a high risk of error and other aspects of the monitoring and reporting procedure which are likely to contribute to errors in the determination of the overall emissions. This especially involves the choice of the emission factors and the calculations necessary to determine the level of the emissions from individual sources. Particular attention shall be given to those sources with a high risk of error and the abovementioned aspects of the monitoring procedure.
10. The verifier shall take into consideration any effective risk control methods applied by the operator with a view to minimising the degree of uncertainty.
Report
11. The verifier shall prepare a report on the validation process stating whether the report pursuant to Article 14(3) is satisfactory. This report shall specify all issues relevant to the work carried out. A statement that the report pursuant to Article 14(3) is satisfactory may be made if, in the opinion of the verifier, the total emissions are not materially misstated.
Minimum competency requirements for the verifier
12. The verifier shall be independent of the operator, carry out his activities in a sound and objective professional manner, and understand:
the provisions of this Directive, as well as relevant standards and guidance adopted by the Commission pursuant to Article 14(1);
the legislative, regulatory, and administrative requirements relevant to the activities being verified; and
the generation of all information related to each source of emissions in the installation, in particular, relating to the collection, measurement, calculation and reporting of data.
PART B — Verification of emissions from aviation activities
13. The general principles and methodology set out in this Annex shall apply to the verification of reports of emissions from flights falling within an aviation activity listed in Annex I.
For this purpose:
in paragraph 3, the reference to operator shall be read as if it were a reference to an aircraft operator, and in point (c) of that paragraph the reference to installation shall be read as if it were a reference to the aircraft used to perform the aviation activities covered by the report;
in paragraph 5, the reference to installation shall be read as if it were a reference to the aircraft operator;
in paragraph 6 the reference to activities carried out in the installation shall be read as a reference to aviation activities covered by the report carried out by the aircraft operator;
in paragraph 7 the reference to the site of the installation shall be read as if it were a reference to the sites used by the aircraft operator to perform the aviation activities covered by the report;
in paragraphs 8 and 9 the references to sources of emissions in the installation shall be read as if they were a reference to the aircraft for which the aircraft operator is responsible; and
in paragraphs 10 and 12 the references to operator shall be read as if they were a reference to an aircraft operator.
Additional provisions for the verification of aviation emission reports
14. The verifier shall in particular ascertain that:
all flights falling within an aviation activity listed in Annex I have been taken into account. In this task the verifier shall be assisted by timetable data and other data on the aircraft operator’s traffic including data from Eurocontrol requested by that operator;
there is overall consistency between aggregated fuel consumption data and data on fuel purchased or otherwise supplied to the aircraft performing the aviation activity.
Additional provisions for the verification of tonne-kilometre data submitted for the purposes of Articles 3e and 3f
15. The general principles and methodology for verifying emissions reports under Article 14(3) as set out in this Annex shall, where applicable, also apply correspondingly to the verification of aviation tonne-kilometre data.
16. The verifier shall in particular ascertain that only flights actually performed and falling within an aviation activity listed in Annex I for which the aircraft operator is responsible have been taken into account in that operator’s application under Articles 3e(1) and 3f(2). In this task the verifier shall be assisted by data on the aircraft operator’s traffic including data from Eurocontrol requested by that operator. In addition, the verifier shall ascertain that the payload reported by the aircraft operator corresponds to records on payloads kept by that operator for safety purposes.
( 1 ) Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution prevention and control) (OJ L 334, 17.12.2010, p. 17).
( 2 ) Decision (EU) 2015/1814 of the European Parliament and of the Council of 6 October 2015 concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading system and amending Directive 2003/87/EC (OJ L 264, 9.10.2015, p. 1).
( 3 ) Commission Decision 2011/278/EU of 27 April 2011 determining transitional Union-wide rules for harmonised free allocation of emission allowances pursuant to Article 10a of Directive 2003/87/EC of the European Parliament and of the Council (OJ L 130, 17.5.2011, p. 1).
( 4 ) Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC (OJ L 315, 14.11.2012, p. 1).
( 5 ) Commission Decision 2010/670/EU of 3 November 2010 laying down criteria and measures for the financing of commercial demonstration projects that aim at the environmentally safe capture and geological storage of CO2 as well as demonstration projects of innovative renewable energy technologies under the system for greenhouse gas emission allowance trading within the Union established by Directive 2003/87/EC of the European Parliament and of the Council (OJ L 290, 6.11.2010, p. 39).
( 6 ) Commission Decision 2014/746/EU of 27 October 2014 determining, pursuant to Directive 2003/87/EC of the European Parliament and of the Council, a list of sectors and subsectors which are deemed to be exposed to a significant risk of carbon leakage, for the period 2015 to 2019 (OJ L 308, 29.10.2014, p. 114).
( 7 ) Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing a Recovery and Resilience Facility (OJ L 57, 18.2.2021, p. 17).
( 8 ) Commission Regulation (EU) No 1031/2010 of 12 November 2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/EC of the European Parliament and of the Council establishing a system for greenhouse gas emission allowances trading within the Union (OJ L 302, 18.11.2010, p. 1).
( 9 ) Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ L 193, 30.7.2018, p. 1).
( 10 ) OJ L 96, 12.4.2003, p. 16.
( 11 ) OJ L 140, 5.6.2009, p. 114.
( 12 ) Commission Delegated Regulation (EU) 2019/1603 of 18 July 2019 supplementing Directive 2003/87/EC of the European Parliament and of the Council as regards measures adopted by the International Civil Aviation Organisation for the monitoring, reporting and verification of aviation emissions for the purpose of implementing a global market-based measure (OJ L 250, 30.9.2019, p. 10).
( 13 ) OJ L 240, 24.8.1992, p. 1.
( 14 ) Regulation (EU) No 525/2013 of the European Parliament and of the Council of 21 May 2013 on a mechanism for monitoring and reporting greenhouse gas emissions and for reporting other information at national and Union level relevant to climate change and repealing Decision No 280/2004/EC (OJ L 165, 18.6.2013, p. 13).
( 15 ) Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by the Member States of the Commission's exercise of implementing powers (OJ L 55, 28.2.2011, p. 13).
( 16 ) OJ L 123, 12.5.2016, p. 1.
( *1 ) OJ L 275, 25.10.2003, p. 32.’
( 17 ) Commission Regulation (EU) No 606/2010 of 9 July 2010 on the approval of a simplified tool developed by the European organisation for air safety navigation (Eurocontrol) to estimate the fuel consumption of certain small emitting aircraft operators (OJ L 175, 10.7.2010, p. 25).