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Amount Italy owes NER companies grows to €500m

03 Jan 2013 18:19:53 | edcm


Italy will have to pay a further €62m to energy and industrial firms forced to buy EU allowances (EUAs) on the market during phase II of the EU Emission Trading System (ETS), energy regulator AEEG ruled in December, but concerns are growing over when the payments will be made.

The money is to compensate new entrants into the EU ETS during the 2008-2012 period, which were not allocated the free allowances they were entitled to receive after Italy slashed its new entrant reserve (NER). The Italian government passed a measure to reimburse energy and industrial companies that had to buy such EUAs (see EDCM 05 May 2010).

The regulator calculates the reimbursements based on a number of EUAs per installations which the country's ETS and Kyoto managing committee sends to it. AEEG calculates the sum owed based on the annual average EUA spot price and volumes exchanged on the main European exchanges. The final value owed to every installation is obtained by multiplying this value by the number of EUAs.

The watchdog's latest calculation was based on 4.7m EUAs 3.7m for 2011, 1.0m for 2010, 20,000 for 2009 and 3,000 for 2008.

The regulator has previously calculated that €432m is owed to other companies.

However, no reimbursements have been distributed to date, an industry source close to the issue said. According to the 2010 law, the reimbursements and the interests on them must be distributed "without any additional burden" to the state budget, and the money must come from the proceeds of phase III auctions. The reimbursements must be allocated within 90 days of receipt of the auction proceeds. Phase III auctions started in November 2012.

The industry source said there is still great uncertainty regarding when these reimbursements will be given out.

"People are worried. They fear that the reimbursements will be postponed from 2013 to 2014 and beyond, on the basis that interest will be paid, and that proceeds from the auctions might be used for other state budget purposes," he said.

Industry has already voiced its concerns on the issue (see EDCM 30 September 2011).

The environment ministry did not reply to ICIS's queries on Thursday on the time frame for the reimbursements.

Sum to continue growing

The total owed could grow even more, data from the ETS and Kyoto managing committee show, as the regulator has yet to make calculations regarding further EUAs that the committee has already certified some installations were entitled to receive in phase II.

Italy opted to use the common EU platform for auctioning emission allowances for Phase III, unlike Germany, Poland and the UK - which have decided to opt out and appoint their own auction platform instead. SM

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