EU Emissions Trading Scheme
The EU Emissions Trading Scheme (EU ETS) is one of the most advanced examples of a GHG emission control scheme to be introduced by a Kyoto signatory country to facilitate the attainment of the Protocol's targets.
The EU ETS introduced mandatory GHG emission controls for industrial activities from 1 January 2005. During the first phase of the EU ETS, which runs from 2005-2007, the scheme will place controls on the release of carbon dioxide from power and heat generation, oil refining, coke ovens, cement, lime and brick production, and the manufacture of ferrous metals, pulp and paper. The scope of the scheme is expected to be widened to include other GHG emissions and industrial activities from January 2008.
Affected manufacturing operations will be able to comply with the EU ETS by taking action to control the emissions released by their activities or by purchasing emission rights from the trading scheme. Manufacturing facilities that fail to comply with the scheme will face harsh financial penalties of 40 Euros for every ton of carbon dioxide equivalent for which they are out of compliance during the period 2005-2007. Penalties will increase to 100 Euros/tonne from 2008.
For further information see: http://europa.eu.int/comm/environment/climat/emission.htm
The EU ETS will be expanded in Phase II to incorporate the following additional sectors:
Glass
Mineral Wool
Gypsum
Petrochemicals (crackers)
Carbon Black
Integrated Steelworks
Flaring from offshore oil and gas production
The debate on whether to include air travel remains unresolved.
Click here to open a DEFRA explanatory note on expansion, which provides detail on the sector thresholds and other Phase II issues.
