Germany to hand out free CO2 permits in coming days, says DEHSt

13 February 2014 14:47 Source:ICIS

Germany will hand out free emissions allowances for both 2013 and 2014 in the next few days, a spokesman from the German emissions authority Deutsche Emissionshandelsstelle (DEHSt) said to ICIS on Thursday.

Germany, the EU nation with the largest 2013 compliance year free allowance request of 173m EU allowances (EUAs) got the go-ahead from the European Commission on Wednesday to begin handing out the permits to industrial companies in the country.

“We will start [distributing the permits] in the following days and I guess we will hand out 2013 and 2014 permits in one go”, a DEHSt spokesman said.

“We have the official go[-ahead] for 2013 and expect the approval for 2014 any time from now”, another spokeswoman from the German authority added.

The commission on Wednesday also approved free permit requests from Belgium, Estonia, Finland, Luxembourg and Slovenia, totalling 71m EUAs.

The earliest the nations can feasibly begin distributing the allowances to operators within their borders is Thursday, although it is up to each member state to determine when the handout will actually commence.

The commission has now approved 69% of the 887m free EUAs available to all EU states.

Seven countries – Bulgaria, Croatia, Cyprus, Italy, Poland, Romania and Spain – are awaiting a decision from the commission (see table). These nations have submitted all necessary information to the commission to get the allowances ( see EDCM 11 February 2014 ).

Market participants last month said that industrial companies are likely to hold onto their existing surplus of allowances, in expectation of rising carbon prices over the next few years ( see 31 EDCM 2014 ). Only firms in a weak financial position are likely to sell, they said.

Analysts thought that later in phase III of the EU emissions trading system (ETS), EUA prices could be around three times higher than where they started 2014, at €4.85/tonne of CO2 equivalent. Ben Lee

By Ben Lee