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Small number of NIMs delay phase III allocation certainty

30 Apr 2012 18:48:06 | edcm

Three more member states are yet to finalise how many free allowances industrial installations will receive in phase III of the EU Emissions Trading System (ETS), as the current phase draws to a close.

Twenty-one countries have now submitted their National Implementation Measures (NIMs) plans to the European Commission.

But Spain is still consulting its industry on how many free allowances installations will receive between 2013-2020, it emerged last week, while Germany has previously said that it will only submit its NIMs at the end of 2012 (see EDCM 14 February 2012). The NIMs detail how many EU allowances (EUAs) created under the phase III cap will be handed out free.

The final number is calculated according to EU-wide benchmarks for industrial sectors and sub-sectors. NIMs submissions were originally due in September 2011 (see EDCM 3 October 2011). But only a handful of countries met the deadline, and submissions have trickled in ever since.

The continued delay could have a knock-on effect on the carbon market. Potential industrial sellers could hold back allowances from the market, as they are unlikely to shed much length before knowing how many allowances they will receive after 2012.

A decree published on Thursday in Spain's official state bulletin BOE explains that the environment ministry has opened a consultation period which will run for 20 working days staring from 23 April 2012, a plan published on the Environment Ministry website said.

The Spanish document said that the companies had to request EUA allowances by 28 February 2011, and then submit the additional documentation by 18 July 2011.

"The complementary documentation submitted has been extensively reviewed," the document said. It also said it will submit its NIMs plan to the Commission when the possible changes from the consultation have been made, but did not provide a date for that. Meanwhile, the Commission declined to comment on whether it would take action against any late submitters although it had previously indicated that it would do so.

Earlier this year, the European Commission took a procedural step towards launching infringement proceedings against EU member states that have failed to submit their plans (see EDCM 11 January 2012).

The Commission opened files under EU Pilot relating to member states' failure to submit their NIMs on time. EU Pilot is a system used by the Commission as a first step when it may have recourse to infringement proceedings to enforce compliance with EU law. Member states had 10 weeks - until 1 March - to provide information to the Commission.

However, when asked last week whether it would take further action, now that some countries have missed this second deadline, a spokeswoman did not want to comment. SM

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