Legislation: COM(2001) 581: Directive on an EU-wide emissions trading scheme - Analysis by ZEW 2002-02-15

The Centre for European Economic Research (ZEW) and the Öko-Institut - Institute for Applied Ecology on behalf of the Ministry for the Environment and Transport of the German State Baden-Württemberg reviewed the planned Directive on an EU-wide emissions trading scheme (COM(2001) 581). They have tried to tackle the main topics of discussion between the various interest groups, i.e.:

• Allocation: method and criteria
• Voluntary vs. mandatory participation, opt-in
• Inclusion of project-based mechanisms
• Coverage of gases
• Interaction with other regulations (taxes, voluntary agreements and support schemes for renewable energy)
• Electricity production

All in all, they found that the proposed Directive is well-suited to the overall framework of the Kyoto Protocol and keeps successfully the balance between the various interests of involved stakeholders. Nonetheless, some changes seems to be necessary. They indicated that the two main corrections are:

1. Annex III (criteria for national allocation plans): The allocation plans will be reviewed by the Regulatory Committee and can be rejected by the Commission if a plan is inconsistent with the criteria under Annex III. The criteria are very general and leave too much room for interpretation The existing proposal stresses too strongly the principle of subsidiarity. Annex III should be further harmonized and the criteria further specified. Some suggestions can be found in our article.
2. Electricity production from combined heat and power (CHP): Large CHP plants might compete with combustion units on the heat market which are not regulated under the Directive. Therefore, the heat produced by CHP plants should be exempted from the obligation. Both suggestions are aimed at the prevention of market distortions between participants of the trading regime and between participants and non-participants to the extent possible.

The entire text of the opinion can be downloaded as PDF file at:

• English
• German

The text of the proposed directive can be also downloaded as PDF file at:

• English
• German

Further Information:

Martin Cames, Öko-Institut, Tel.: +49-30-280 486-83, m.cames@oeko.de
Marcus Stronzik, ZEW, Tel.: +49-621-12 35-203, stronzik@zew.de

To find similar reports, click on a keyword below:
Electricity : Emissions : Gas : Heat/Heating : Legal initiatives : Polygeneration : Renewable Energy Sources & Systems : Sustainable Development

Complete the Questionnaire to add your organisation to this website

ZEW - Zentrum für Europäische Wirtschaftsforschung Centre for European Economic Research

Öko-Institut (Institut für angewandte Ökologie) Institute for Applied Ecology