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EU court annuls Polish, Estonian NAP revisions

05 October 2009 00:00  [Source: ICB]

Tom Marzec-Manser/London

THE EUROPEAN Court of First Instance has overturned a decision by the European Commission to revise Poland and Estonia's national allocation plans (NAPs) for Phase II of the emissions trading scheme. Should the ruling be upheld, an extra 87.79 EU allowances (EUAs) might become available to the two countries every year.

The court found that the Commission overstepped its power when it reassessed Poland and Estonia's NAPs.

Completely redrafting the plans, which cover 2008-2012, was the responsibility of the member state alone, the court said. It added that the Commission could only review, and possibly reject, a member state's NAP, and that this power was very restricted.

Poland initially submitted an NAP that totaled 284.65m EUAs/year, which the Commission cut by 26.7% to 208.51m. In the case of Estonia, the Commission cut the NAP by 47.8% from 24.38m to 12.72m.

If the original drafted NAP is used by Poland, the ceramic, metal ore and steel sectors stand to see their allocations rise by the largest percentage.

The power sector, which was originally allocated nearly 80% of the country's NAP, could be allocated an additional 50m EUAs/year.

Given that Poland's power industry was only short by some 4m EUAs in 2008, the ruling could switch it from a small net importer to a large net exporter of EUAs, to the sum of 46m/year.

Poland and Estonia may have to rework their NAPs completely, however.

Earlier this year, Yvon Slingenberg, who heads the Commission's emissions trading unit, suggested the most recent economic data could be used to recalculate new NAPs.

Given the effects of the recession, this would result in lower levels of emissions than the data that was originally used to calculate the NAPs.

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