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EU outlines defence against Polish carbon benchmark lawsuit

11 Jul 2011 18:28:39 | edcm

The European Commission plans to fight a Polish lawsuit against new emissions benchmarks by pointing to an article saying plants cannot receive extra free allowances just because they use a dirtier fuel in production. If successful, the lawsuit could increase the supply of emissions allowances in circulation in phase III of the EU emissions trading system (EU ETS).

Poland wants the Commission to change the benchmarks that will decide how many allowances that plants will get free of charge as of 2013 and has launched a case in the European Court of Justice to make this happen.

Poland wants a less strict benchmark and more free allowances for plants that use more polluting fuels.

This is against EU law on emissions trading, a Commission spokeswoman said by email on Monday. The ETS directive states that benchmarks have to be set "for products rather than inputs", she said.

To give more free EU allowances (EUAs) to plants using dirtier fuels would "violate the ETS directive" by "rewarding high emitting installations", she added.

This is not the first time that Poland has tried to derail the benchmarks, which gained EU-wide approval in December last year. A group of European Parliamentarians tried to rally a vote against the benchmarks earlier this spring, but were rebuffed by a large majority (see EDCM 16 March 2011).

The benchmarks are based on the top 10% most carbon-efficient plants in any sector. Sectors will receive allowances matching 80-100% of the benchmark free of charge in phase III of the EU ETS.

The Commission estimates that fewer than one-half of the EUAs will be given out for free, as opposed to sold in auction, but the exact figure is not yet known. IS

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