INFORMATION BULLETIN
Date: 5 February 2008
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2006 UK results for EU Emissions Trading Scheme published
The EU Emissions Trading Scheme worked smoothly in 2006, but was adversely affected by a low carbon price caused by overallocation of allowances in some Member States, a report detailing the 2006 results, published by Defra today, has shown.
In 2006, there was 100% compliance from the 12,000 installations monitoring and reporting emissions.
The report shows that the UK had a deficit of 33 million allowances in 2006, demonstrating that the UK had set a realistic emissions cap for its industries. The unusually high international price of gas also drove more coal-fired electricity generation, causing a further shortfall of allowances in the UK.
The report also shows that across the EU there was a significant oversupply of allowances in 2006, which led to the Phase I allowance price dropping throughout 2006.
The issue of overallocation in some EU Member States was a problem identified in Phase I, and the European Commission took strong and welcome action to ensure that there was real scarcity in the market for Phase II, which started this year. The strong carbon price so far in Phase II is an encouraging indication that this problem has been resolved.
The report draws together the results across the UK industry sectors covered by the EU ETS and looks at the key factors that affected the results e.g. fuel prices, energy prices and emission projections.
The report also indicates where industry were given the opportunity to comment on how the scheme has affected them and what abatement opportunities they are taking up as a result of the EU ETS.
The results of the first year were released in late 2006 and represented a key milestone for the EU ETS.
Defra published a series of summary reports focusing on the UK 2005 results across each sector. In April 2007 the European Commission released provisional results for 2006, which summarised the results for UK installations in the second year of trading.
The report is available on the EU Emissions Trading Scheme pages on the Defra website.
Further information
- The EU Emissions Trading Scheme (EU ETS) is a Europe wide scheme which aims to reduce emissions of carbon dioxide and combat the serious threat of climate change. EU ETS puts a price on carbon that businesses use and creates a market for carbon. It has been in place since 2005 and is the first scheme of its kind in the world.
- Phase 2 of the EU ETS began on 1 January 2008. Learning lessons from Phase 1 it will have high standards across Europe in terms of monitoring, reporting and verification as well as enforcement of sanctions. It will also include aviation emissions, greater transparency of NAPS and assessment, and link to the Kyoto project mechanisms.
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Page published: 5 February 2008 13:40