EC ‘exceeded its powers’ by seeking to limit states’ emissions

The international courts have upheld a claim by Poland and other Central European countries that the EC over-stepped the mark when it set a ceiling for the carbon emissions of individual states.

As part of the European Emissions Trading Scheme (ETS), the EC asks each member state to develop its own National Allocation Plan (NAP) outlining the number of allowances it intends to issue to its industry.

These NAPs must be developed according to strict criteria which act as a safeguard designed limit a country’s ability to be over-generous in its allocation.

But in 2006, the commission rejected the NAPs of Poland and Estonia saying the levels they set for the 2008-2012 trading period were too high and told them to reduce their allocations by 27% and 48% respectively.

The countries appealed, backed by Slovakia, Lithuania and Hungary and the European Court of First Instance has ruled in their favour.

The ruling, in effect, says that while the EC can compel countries to work within the criteria set for NAPs, it has no power to decide on the final figure, provided a member state can show it’s ticked all the right boxes.

The decision is likely to have an impact on carbon markets, as higher NAPs lead to a lack of scarcity of allowances, making them far cheaper than might otherwise have been the case.

This, in turn, will ease the pressure on polluters to reduce their carbon emissions.

Sam Bond

Action inspires action. Stay ahead of the curve with sustainability and energy newsletters from edie