Proposal for a Directive of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC
Date: 2001-10-23
Institutions: European Commission
Subjects: EU environmental policy, air quality, greenhouse gas, industrial pollution, polluter pays principle, pollution control measures, waste management

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Official Journal of the European Communities

C 75 E/33

Proposal for a Directive of the European Parliament and of the Council establishing a scheme for
greenhouse gas emission allowance trading within the Community and amending Council
Directive 96/61/EC

(2002/C 75 E/04)

(Text with EEA relevance)

COM(2001) 581 final (cid:151) 2001/0245(COD)

(Submitted by the Commission on 23 October 2001)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 175(1) thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of
Committee,

the Economic and Social

Having regard to the opinion of the Committee of the Regions,

Acting in accordance with the procedure laid down in Article
251 of the Treaty,

Whereas:

(1) The Green Paper on greenhouse gas emissions trading
within the European Union (1) launched a debate across
Europe on the suitability and possible functioning of
greenhouse gas emissions trading within the European
Union. The European Climate Change Programme (2) has
considered Community policies and measures through a
including a framework for
multi-stakeholder process,
trading in the Community
greenhouse gas emissions
In its Conclusions of 8
based on the Green Paper.
March 2001,
recognised the particular
the Council
importance of the European Climate Change Programme
and work based on the Green Paper, and underlined the
urgent need for concrete action at Community level.

(2) The sixth Environmental Action Programme: Environment
2010: Our Future, Our Choice (3) identifies climate change
as a priority for action and provides for the establishment
of a Community-wide emissions trading scheme by 2005.
the Community is
That Programme recognises
committed to achieving an 8 % reduction in emissions
of greenhouse gases by 2008 to 2012 compared to
1990 levels,
longer-term global
emissions of greenhouse gases will need to be reduced
by approximately 70 % compared to 1990 levels.

in the

that

that

and

(1) COM(2000) 87.
(2) COM(2000) 88.
(3) COM(2001) 31.

(3) The ultimate objective of the United Nations Framework
Convention on Climate Change, which was approved by
Council Decision 94/69/EC of 15 December 1993
the United Nations
concerning
conclusion of
Framework Convention on Climate Change (4),
to
achieve stabilisation of greenhouse gas concentrations in
the atmosphere at a level which prevents dangerous
anthropogenic interference with the climate system.

the

is

. ./. . ./EC [of

by Council Decision

(4) Once it enters into force, the Kyoto Protocol, which was
approved
. . .,
concerning the conclusion of the Kyoto Protocol to the
Framework Convention on Climate
United Nations
commitments
Change
its
and
thereunder] will
Member States to reduce their aggregate anthropogenic
emissions of greenhouse gases listed in Annex A to the
Protocol by 8 % compared to 1990 levels in the period
2008 to 2012.

the Community

joint
commit

fulfilment of

and

the

their

commitments

(5) The Community and its Member States have agreed to
anthropogenic
fulfil
greenhouse gases emissions under the Kyoto Protocol
jointly, in accordance with Decision . ./. . ./EC [concerning
the conclusion of
to the United
Nations Framework Convention on Climate Change and
the joint fulfilment of commitments thereunder].

the Kyoto Protocol

reduce

to

(6) Council Decision 93/389/EEC of 24 June 1993 for a
monitoring mechanism of Community CO2 and other
greenhouse gas emissions (5), established a mechanism
for monitoring greenhouse gas emissions and evaluating
progress towards meeting commitments in respect of
these emissions. This mechanism will assist Member
States in determining the total quantity of allowances to
allocate.

(7) Community provisions relating to allocation of allowances
by the Member States are necessary to contribute to
preserving the integrity of
the internal market and to
avoid distortions of competition.

(4) OJ L 33, 7.2.1994, p. 11.
(5) OJ L 167, 9.7.1993, p. 31; Decision as amended by Decision

1999/296/EC (OJ L 117, 5.5.1999, p. 35).

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(8) Member States should ensure that the operators of certain
specified activities monitor and report their emissions of
greenhouse gases specified in relation to those activities.

Kyoto Protocol. It should be reviewed in the light of devel-
opments
in that context and to take into account
experience in its implementation and progress achieved
in monitoring of emissions of greenhouse gases.

(9) Member States

should lay down rules on penalties
applicable to infringements of
this
Directive and ensure that they are implemented. Those
penalties must be effective, proportionate and dissuasive.

the provisions of

(10) In order to ensure transparency, the public should have
access
to information relating to the allocation of
allowances and to the results of monitoring of emissions
in Council
subject only to restrictions provided for
Directive 90/313/EEC of 7 June 1990 on the freedom of
access to information on the environment (1).

(11) Member States should submit a report on the implemen-
tation of this Directive drawn up on the basis of Council
Directive 91/692/EEC of 23 December 1991 standardising
and rationalising reports on the implementation of certain
Directives relating to the environment (2).

(12) Since the measures necessary for the implementation of
this Directive are measures of general scope within the
meaning of Article 2 of Council Decision 1999/468/EC of
28 June 1999 laying down the procedures for the exercise
of implementing powers conferred on the Commission (3),
they should be adopted by use of
regulatory
procedure provided for in Article 5 of that Decision.

the

(13) Council Directive 96/61/EC of 24 September 1996
concerning integrated pollution prevention and control (4)
establishes a general framework for pollution prevention
through which greenhouse gas emissions
and control,
permits may be issued. Directive 96/61/EC should be
amended to ensure that emission limit values are not set
for direct emissions of greenhouse gases from an instal-
lation subject to this Directive, without prejudice to any
other requirements pursuant to Directive 96/61/EC.

(14) Since the objective of

cannot

trading

the proposed action,

in the Community,

the estab-
lishment of a scheme for greenhouse gas emission
be
allowance
sufficiently achieved by the Member States acting indi-
vidually, and can therefore by reason of the scale and
effects of
the proposed action be better achieved at
Community level, the Community may adopt measures,
in accordance with the principle of subsidiarity as set out
in Article 5 of the Treaty. In accordance with the principle
of proportionality, as set out in that Article, this Directive
does not go beyond what is necessary in order to achieve
that objective.

(15) This Directive is compatible with the United Nations
Framework Convention on Climate Change and the

(1) OJ L 158, 23.6.1990, p. 56.
(2) OJ L 377, 31.12.1990, p. 48.
(3) OJ L 184, 17.7.1999, p. 23.
(4) OJ L 257, 10.10.1996, p. 26.

(16) Emission allowance trading should form part of a compre-
hensive and coherent package of policies and measures
implemented at Member State and Community level.
Without prejudice to the application of Articles 87 and
88 of
the Treaty, where activities are covered by the
Community greenhouse gas emission allowance trading
scheme,
it would be appropriate to take into account
the level of taxation that pursues the same objectives.
The review of the Directive should consider the extent
to which these have been attained.

(17) This Directive

and
the
observes the principles recognised in particular by the
Charter of Fundamental Rights of the European Union,

fundamental

respects

rights

HAVE ADOPTED THIS DIRECTIVE:

Article 1

Subject matter

establishes

This Directive
a Community greenhouse gas
to promote
emission allowance trading scheme in order
reductions of greenhouse gas emissions in a cost-effective
manner.

Article 2

Scope

This Directive shall apply to emissions from the activities
1.
listed in Annex I of greenhouse gases specified in relation to
those activities.

This Directive shall apply without prejudice to any
to Directive 96/61/EC that relate to

2.
requirements pursuant
energy efficiency.

Article 3

Definitions

For the purposes of this Directive the following definitions
shall apply:

(a) (cid:145)allowance(cid:146) means an allowance to emit one tonne of
carbon dioxide equivalent during a specified period valid
only for the purposes of meeting the requirements of this
Directive and which is transferable in accordance with the
provisions of this Directive;

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(b) (cid:145)emissions(cid:146) means the release of greenhouse gases into the

atmosphere from sources in an installation;

(c) (cid:145)greenhouse gases(cid:146) means the gases listed in Annex II;

(d) (cid:145)greenhouse gas emissions permit(cid:146) means the permit issued

in accordance with Articles 5 and 6;

Article 6

Conditions for and contents of the permit

The competent authority shall

1.
issue a greenhouse gas
emissions permit granting authorisation to emit greenhouse
gases from all or part of an installation if it is satisfied that
the operator is capable of monitoring and reporting emissions.

(e) (cid:145)installation(cid:146) means a stationary technical unit where one or

more activities listed in Annex I are carried out;

A permit may cover one or more installations on the same site
operated by the same operator.

(f)

(cid:145)operator(cid:146) means any person who operates or controls an
installation or, where this is provided for in national legis-
lation,
the
technical functioning of the installation has been delegated;

economic power over

to whom decisive

(g) (cid:145)person(cid:146) means any natural or legal person;

(h) (cid:145)the public(cid:146) means one or more persons and, in accordance
legislation or practice, associations, organi-

with national
sations or groups of persons;

(i)

(cid:145)tonne of carbon dioxide equivalent(cid:146) means one metric
tonne of carbon dioxide (CO2) or an amount of any
other greenhouse gas listed in Annex II with an equivalent
global warming potential.

Greenhouse gas emissions permits

2.
following:

shall contain the

(a) the name and address of the operator;

(b) a description of the activities and emissions from the instal-

lation;

(c) monitoring requirements, specifying monitoring methodo-

logy and frequency;

(d) reporting requirements; and

Article 4

Greenhouse gas emissions permits

(e) an obligation to surrender allowances equal to the total
emissions of
the installation in each calendar year, as
verified in accordance with Article 15, within three
months following the end of that year.

Member States shall ensure that, from 1 January 2005, no
installation undertakes any activity listed in Annex I resulting
in emissions of a greenhouse gas specified in relation to that
activity unless
issued by a
its operator holds a permit
competent authority in accordance with Articles 5 and 6.

Article 5

Applications for permits

An application to the competent authority for a greenhouse
gas emissions permit shall include a description of:

(a) the installation and its activities;

Article 7

Changes relating to installations

The operator shall
inform the competent authority of any
change planned in the nature or functioning, or an extension,
the
of
installation which may require updating of
greenhouse gas emissions permit. Where appropriate,
the
competent authority shall update the permit.

the

Where there is a change in the identity of the installation’s
operator, the competent authority shall update the permit to
include the name and address of the new operator.

(b) the raw and auxiliary materials, the use of which is likely to

lead to emissions;

(c)

the sources of emissions from the installation; and

(d) the measures planned to monitor emissions, in accordance

with the guidelines adopted pursuant to Article 14.

The application shall also include a non-technical summary of
the details referred to in the first paragraph.

Article 8

Coordination with Directive 96/61/EC

to Directive 96/61/EC,

Member States shall take the necessary measures to ensure that,
where installations carry out activities that are included in
the conditions of, and
Annex I
procedure for,
the issue of a greenhouse gas emissions
permit are coordinated with those for the permit provided
for in that Directive. The requirements of Articles 5, 6 and 7
of
this Directive may be integrated into the procedures
provided for in Directive 96/61/EC.

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Article 9

National allocation plan

1.
For each period referred to in Article 11(1) and (2), each
Member State shall develop a national plan stating the total
quantity of allowances that it intends to allocate for that period
and how it proposes to allocate them. The plan shall be based
on objective and transparent criteria, including those listed in
Annex III.

For the period referred to in Article 11(1), the plan shall be
published and notified to the Commission and to the other
Member States by 31 March 2004 at the latest. For subsequent
periods,
the plan shall be published and notified to the
Commission and to the other Member States at least eighteen
months before the beginning of the relevant period.

least twelve months before the beginning of the relevant period
and be based on its national allocation plan developed pursuant
to Article 9 and in accordance with Article 10, taking due
account of comments from the public.

3.
Decisions taken pursuant to paragraph 1 or 2 shall be in
conformity with the requirements of the Treaty, in particular
Articles 87 and 88 thereof. When deciding upon allocation,
Member States shall take into account the need to provide
access to allowances for new entrants.

The competent authority shall issue a proportion of the
4.
total quantity of allowances each year of the period referred to
in paragraph 1 or 2, by 28 February of that year.

Article 12

National allocation plans shall be considered within the

2.
committee referred to in Article 23(1).

Transfer, surrender and cancellation of allowances

3. Within three months of notification of a national allo-
cation plan by a Member State under paragraph 1,
the
Commission may reject that plan, or any aspect thereof, on
is incompatible with the criteria listed in
the basis that it
Annex III or with Article 10. The Member State shall only
take a decision under Article 11(1) or
if proposed
amendments are accepted by the Commission.

(2)

Article 10

Method of allocation

For the three-year period beginning 1 January 2005,

1.
Member States shall allocate allowances free of charge.

The Commission shall specify a harmonised method of
2.
allocation for the five-year period beginning 1 January 2008 in
accordance with the procedure referred to in Article 23(2).

Article 11

Allocation and issue of allowances

shall decide upon the

For the three-year period beginning 1 January 2005, each
1.
Member State
total quantity of
allowances it will allocate for that period and the allocation
of those allowances to the operator of each installation. This
decision shall be taken at
three months before the
least
beginning of the period and be based on its national allocation
plan developed pursuant to Article 9 and in accordance with
Article 10, taking due account of comments from the public.

2.
For the five-year period beginning 1 January 2008, and
for each subsequent five-year period, each Member State shall
decide upon the total quantity of allowances it will allocate for
that period and the allocation of
those allowances to the
operator of each installation. This decision shall be taken at

1. Member States shall ensure that allowances can be trans-
ferred between persons within the Community without
restrictions other
adopted
pursuant to, this Directive.

contained in, or

than those

2. Member States shall ensure that allowances issued by a
competent authority of another Member State are recognised
for the purpose of meeting an operator’s obligations pursuant
to paragraph 3.

3. Member States shall ensure that, by 31 March each year
at the latest, the operator of each installation surrenders a
number of allowances equal to the total emissions from that
installation during the preceding calendar year as verified in
accordance with Article 15, and that these are subsequently
cancelled.

4. Member States shall take the necessary steps to ensure
that allowances can be cancelled at any time at the request of
the person holding them.

Article 13

Validity of allowances

1.
Allowances shall be valid for emissions during the period
referred to in Article 11(1) or (2) for which they are issued.

Three months after the beginning of the first five-year
2.
period referred to in Article 11(2), allowances which are no
longer valid and have not been surrendered and cancelled in
accordance with Article 12(3)
shall be cancelled by the
competent authority.

Member States may issue allowances to persons for the current
period to replace any allowances held by them which are
cancelled in accordance with the first subparagraph.

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Three months after the beginning of each subsequent
3.
five-year period referred to in Article 11(2), allowances which
are no longer valid and have not been surrendered and
cancelled in accordance with Article 12(3) shall be cancelled
by the competent authority.

provided for must be effective, proportionate and dissuasive.
Member States shall notify these provisions to the Commission
by 31 December 2003 at the latest, and shall notify it without
delay of any subsequent amendment affecting them.

Member States shall issue allowances to persons for the current
period to replace any allowances held by them which are
cancelled in accordance with the first subparagraph.

2. Member States shall publish the names of operators who
are in breach of national provisions adopted pursuant to this
Directive.

Article 14

Guidelines for monitoring and reporting of emissions

1.
The Commission shall adopt guidelines for monitoring
and reporting of emissions resulting from the activities listed
in Annex I of greenhouse gases specified in relation to those
activities,
in accordance with the procedure referred to in
Article 23(2). The guidelines shall be based on the principles
for monitoring and reporting set out in Annex IV.

2. Member States shall ensure that emissions are monitored
in accordance with the guidelines.

3. Member States shall ensure that each operator of an
installation
emissions
installation reports
during each calendar year to the competent authority at the
end of that year in accordance with the guidelines.

from that

the

Article 15

Verification

Member States shall ensure that
the reports submitted by
operators pursuant to Article 14(3) are verified in accordance
with the criteria set out in Annex V, and that the competent
authority is informed thereof.

Member States shall ensure that an operator whose report has
not been verified as satisfactory in accordance with the criteria
set out in Annex V by 31 March each year for emissions during
the preceding year cannot make further transfers of allowances
until a report from that operator has been verified as satis-
factory.

Article 16

Penalties

lay down the rules on penalties
1. Member States shall
applicable
the national provisions
adopted pursuant to this Directive and shall take all measures
necessary to ensure that they are implemented. The penalties

to infringements of

3. Member States shall ensure that any operator which does
not surrender sufficient allowances by 31 March of each year to
cover its emissions during the preceding year shall be held
liable for the payment of an excess emissions penalty. The
excess emissions penalty shall be either EUR 100 or twice
the average market price between 1 January and 31 March
that year for allowances valid for emissions during the
of
for each tonne of
preceding year, whichever is the higher,
carbon dioxide equivalent emitted by that
installation for
which the operator has not surrendered allowances. Payment
of the excess emissions penalty shall not release the operator
from the obligation to surrender an amount of allowances
equal to those excess emissions when surrendering allowances
in relation to the following calendar year.

4.
During the three-year period beginning 1 January 2005,
Member States shall apply a lower excess emissions penalty of
EUR 50 or twice the average market price between 1 January
and 31 March of that year for allowances valid for emissions
during the preceding year, whichever is the higher, for each
tonne of carbon dioxide equivalent emitted by that installation
for which the operator has not
surrendered allowances.
Payment of the excess emissions penalty shall not release the
operator
from the obligation to surrender an amount of
allowances equal to those excess emissions when surrendering
allowances in relation to the following calendar year.

Article 17

Access to information

Decisions relating to the allocation of allowances and the
reports of emissions
the greenhouse gas
required under
emissions permit and held by the competent authority shall
be made available to the public by that authority subject to
the restrictions laid down in Article 3(2) and (3) of Directive
90/313/EEC.

Article 18

Competent authority

shall make the appropriate administrative
Member States
arrangements,
the appropriate
including the designation of
competent authority or authorities, for the implementation of
the rules of this Directive. Where more than one competent
authority is designated, the work of these authorities pursuant
to this Directive must be coordinated.

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Article 19

Registries

1. Member States shall establish and maintain a registry in
order to ensure the accurate accounting of the issue, holding,
transfer and cancellation of allowances. Member States may
maintain their registries in a consolidated system,
together
with one or more other Member States.

2.
Any person may hold allowances. The registry shall
contain separate accounts to record the allowances held by
each person to whom allowances are issued or transferred.

3.
In order to implement this Directive, the Commission
shall adopt a Regulation in accordance with the procedure
referred to in Article 23(2)
for a standardised and secured
system of registries in the form of standardised electronic
databases, containing common data elements to track the
issue, holding,
to
provide for confidentiality as appropriate and to ensure that
there are no transfers incompatible with obligations resulting
from the Kyoto Protocol.

transfer and cancellation of allowances,

Article 20

Central Administrator

The Commission shall designate a Central Administrator
1.
to maintain an independent transaction log recording the issue,
transfer and cancellation of allowances.

procedure laid down in Article 6 of Directive 91/692/EEC.
The questionnaire or outline shall be sent to Member States
at least six months before the deadline for the submission of
the first report.

2.
Based on the reports referred to in paragraph 1 the
Commission shall publish a report on the application of this
Directive within three months of receiving the reports from the
Member States.

shall

3.
The Commission
of
the
information between the
Member States concerning developments related to issues of
allocation, the operation of registries, monitoring, reporting,
verification and compliance.

exchange
authorities of

competent

organise

an

Article 22

Amendments to Annex III

The Commission may amend Annex III
reports pursuant
application of
procedure referred to in Article 23(2).

this Directive,

in the light of the
the
in accordance with the

to Article 21 and experience of

Article 23

Committee

The Commission shall be assisted by the committee

1.
instituted by Article 8 of Decision 93/389/EEC.

2.
The Central Administrator shall conduct an automated
check on each transaction in registries through the independent
transaction log to ensure there are no irregularities in the issue,
transfer and cancellation of allowances.

2. Where reference is made to this paragraph, the regulatory
procedure laid down in Article 5 of Decision 1999/468/EC
shall apply, in compliance with Article 7 and Article 8 thereof.

irregularities are identified through the automated
3.
If
check,
inform the Member
the Central Administrator shall
State or Member States concerned who shall not register the
transactions in question or any further transactions relating to
the allowances concerned until
the irregularities have been
resolved.

Article 21

Reporting by Member States

shall

submit

Each year

the Member States

to the
1.
Commission a report on the application of
this Directive.
This report shall pay particular attention to the arrangements
for the allocation of allowances, the operation of registries, the
application of the monitoring and reporting guidelines, verifi-
cation and issues related to compliance with the Directive. The
first report shall be sent to the Commission by 31 May 2005.
The report shall be drawn up on the basis of a questionnaire or
outline drafted by the Commission in accordance with the

The period provided for in Article 5(6) of Decision

3.
1999/468/EC shall be three months.

Article 24

Links with other greenhouse gas emissions

trading

schemes

1.
The Community may conclude agreements with third
countries to provide for the mutual recognition of allowances
between the Community greenhouse gas emissions trading
scheme and other greenhouse gas emissions trading schemes
in accordance with the rules set out in Article 300 of the
Treaty.

2. Where an agreement referred to in paragraph 1 has been
concluded,
the Commission shall draw up any necessary
provisions relating to the mutual recognition of allowances
under
in accordance with the procedure
referred to in Article 23(2).

that agreement

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Article 25

(c)

the use of credits from project mechanisms;

Amendment of Directive 96/61/EC

In Article 9(3) of Directive 96/61/EC the following sub-
paragraph is added:

to Directive . . /. . ./EC of

(cid:145)Where emissions of a greenhouse gas from an installation
are specified in Annex I
the
the Council [establishing a
European Parliament and of
scheme for greenhouse gas emission allowance trading
within the Community and amending Council Directive
96/61/EC] (*) in relation to an activity carried out in that
installation, the permit shall not include an emission limit
value for direct emissions of that gas unless it is necessary
to ensure that no significant
local pollution is caused.
Where necessary, the competent authorities shall amend
the permit to remove the emission limit value.

___________
(*) OJ L . . .(cid:146)

Article 26

Review

1.
Based on progress achieved in the monitoring of
emissions of greenhouse gases, the Commission may make a
proposal to the European Parliament and the Council by 31
December 2004 to amend Annex I to include other activities
and emissions of other greenhouse gases listed in Annex II.

2.
Based on experience of the application of this Directive
and on progress achieved in the monitoring of emissions of
greenhouse gases and in the light of developments in the inter-
national context, the Commission may draw up a report on the
application of this Directive, considering:

(a) whether Annex I should be amended to include other
activities and emissions of other greenhouse gases listed
in Annex II, with a view to further
improving the
economic efficiency of the scheme;

(d) the relationship of emissions trading with other policies
and measures
and
Community level, including taxation that pursue the same
objectives; and

implemented

at Member

State

(e) whether

it
Community registry.

is appropriate for

there to be a single

The Commission shall submit any such report to the European
Parliament and the Council by 30 June 2006, accompanied by
proposals as appropriate.

Article 27

Implementation

Member States shall bring into force the laws, regulations and
administrative provisions necessary to comply with this
Directive by 31 December 2003 at
the latest. They shall
forthwith inform the Commission thereof. The Commission
shall notify the other Member States of those laws, regulations
and administrative provisions.

When Member States adopt those provisions, they shall contain
a reference to this Directive or be accompanied by such a
reference on the occasion of
their official publication.
Member States shall determine how such reference is to be
made.

Article 28

Entry into force

This Directive shall enter into force on the twentieth day
following that of its publication in the Official Journal of the
European Communities.

Article 29

Addressees

(b) the harmonised method of allocation necessary;

This Directive is addressed to the Member States.

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CATEGORIES OF ACTIVITIES REFERRED TO IN ARTICLES 2(1), 3, 4, 14(1) AND 26

ANNEX I

1. Installations or parts of installations used for research, development and testing of new products and processes are

not covered by this Directive.

2. The threshold values given below generally refer to production capacities or outputs. Where one operator carries out
several activities falling under the same subheading in the same installation or on the same site, the capacities of such
activities are added together.

Activities

Greenhouse gases

Energy activities

Combustion installations with a rated thermal
hazardous or municipal waste installations)

input exceeding 20 MW (excepting

Carbon dioxide

Mineral oil refineries

Coke ovens

Production and processing of ferrous metals

Metal ore (including sulphide ore) roasting or sintering installations

Installations for the production of pig iron or steel
including continuous casting, with a capacity exceeding 2,5 tonnes per hour

(primary or secondary fusion)

Carbon dioxide

Carbon dioxide

Carbon dioxide

Carbon dioxide

Mineral industry

Installations for the production of cement clinker in rotary kilns with a production
capacity exceeding 500 tonnes per day or lime in rotary kilns with a production
capacity exceeding 50 tonnes per day or
furnaces with a production
capacity exceeding 50 tonnes per day

in other

Carbon dioxide

Installations for the manufacture of glass including glass fibre with a melting capacity
exceeding 20 tonnes per day

Carbon dioxide

Installations for the manufacture of ceramic products by firing, in particular roofing
tiles, bricks, refractory bricks, tiles, stoneware or porcelain, with a production capacity
exceeding 75 tonnes per day, and/or with a kiln capacity exceeding 4 m3 and with a
setting density per kiln exceeding 300 kg/m3

Carbon dioxide

Other activities

Industrial plants for the production of

(a) pulp from timber or other fibrous materials

Carbon dioxide

(b) paper and board with a production capacity exceeding 20 tonnes per day

Carbon dioxide

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ANNEX II

GREENHOUSE GASES REFERRED TO IN ARTICLES 3 AND 26

Carbon dioxide (CO2)

Methane (CH4)

Nitrous Oxide (N2O)

Hydrofluorocarbons (HFCs)

Perfluorocarbons (PFCs)

Sulphur Hexafluoride (SF6)

CRITERIA FOR NATIONAL ALLOCATION PLANS REFERRED TO IN ARTICLE 9

ANNEX III

1. The total quantity of allowances to be allocated for the relevant period shall be consistent with the Member State’s
obligation to limit its emissions pursuant to Decision . ./. . ./EC and the Kyoto Protocol, taking into account the
proportion of overall emissions that these represent in comparison with emissions from sources not covered by this
Directive;

2. The total quantity of allowances to be allocated shall be consistent with assessments of actual and projected progress

towards fulfilling the Community’s commitments made pursuant to Decision 93/389/EEC;

3. Quantities of allowances to be allocated shall be consistent with the technological potential of installations to reduce

emissions;

4. The plan shall be consistent with other EC legislative and policy instruments. In particular, no allowances should be
allocated to cover emissions which would be reduced or eliminated as a consequence of Community legislation on
renewable energy in electricity production, and account should be taken of unavoidable increases in emissions
resulting from new legislative requirements;

5. The plan shall not discriminate between companies or sectors in such a way as to unduly favour certain undertakings

or activities, nor shall any installation be allocated more allowances than it is likely to need;

6. The plan shall contain information on the manner in which new entrants will be able to begin participating in the

greenhouse gas emissions trading scheme in the Member State;

7. The plan shall contain information on the manner in which early action will be taken into account; and

8. The plan shall include provisions for comments to be expressed by the public, and contain information on the
arrangements by which due account will be taken of these comments before a decision on the allocation of
allowances is taken.

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PRINCIPLES FOR MONITORING AND REPORTING REFERRED TO IN ARTICLE 14(1)

ANNEX IV

Monitoring of carbon dioxide emissions

Emissions shall be monitored either by calculation or on the basis of measurement.

Calculation

Calculations of emissions shall be performed using the formula:

Activity data (cid:215) Emission factor (cid:215) Oxidation factor

Activity data (fuel used, production rate etc.) shall be monitored on the basis of supply data or measurement.

Accepted emission factors shall be used. Activity-specific emission factors are acceptable for all fuels. Default factors are
acceptable for all fuels except non-commercial ones (waste fuels such as tyres and industrial process gases). Seam-specific
defaults for coal, and EU-specific or producer country-specific defaults for natural gas shall be further elaborated. IPCC
default values are acceptable for refinery products. The emission factor for biomass shall be zero.

If the emission factor does not take account of the fact that some of the carbon is not oxidised, then an additional
oxidation factor shall be used. If activity-specific emission factors have been calculated and already take oxidation into
account, then an oxidation factor need not be applied.

Default oxidation factors developed pursuant to Directive 96/61/EC shall be used, unless the operator can demonstrate
that activity-specific factors are more accurate.

A separate calculation shall be made for each activity and for each fuel.

Measurement

Measurement of emissions shall use standardised or accepted methods, and shall be corroborated by a supporting
calculation of emissions.

Monitoring of emissions of other greenhouse gases

Standardised or accepted methods shall be used.

Reporting of emissions

Each operator shall include the following information in the report for an installation:

A. Data identifying the installation, including:

(cid:151) Name of the installation;

(cid:151) Its address, including postcode and country;

(cid:151) Type and number of Annex I activities carried out in the installation;

(cid:151) Address, telephone, fax and e-mail details for a contact person; and

(cid:151) Name of the owner of the installation, and of any parent company.

B. For each Annex I activity carried out on the site for which emissions are calculated:

(cid:151) Activity data;

(cid:151) Emission factors;

(cid:151) Oxidation factors; and

(cid:151) Total emissions.

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C. For each Annex I activity carried out on the site for which emissions are measured:

(cid:151) Total emissions; and

(cid:151) Information on the reliability of measurement methods.

D. For emissions from energy combustion, the report shall also include the oxidation factor, unless oxidation has

already been taken into account in the development of an activity-specific emission factor.

Member States shall take measures to coordinate reporting requirements with any existing reporting requirements in
order to minimise the reporting burden on businesses.

ANNEX V

CRITERIA FOR VERIFICATION REFERRED TO IN ARTICLE 15

General principles

1. Emissions from each activity listed in Annex I shall be subject to verification.

2. The verification process shall include consideration of the report pursuant to Article 14(3) and of monitoring
during the preceding year. It shall address the reliability, credibility and accuracy of monitoring systems and the
reported data and information relating to emissions, in particular:

(a) the reported activity data and related measurements and calculations;

(b) the choice and the employment of emission factors;

(c)

the calculations leading to the determination of the overall emissions; and

(d) if measurement is used, the appropriateness of the choice and the employment of measuring methods.

3. Reported emissions may only be validated if reliable and credible data and information allow the emissions to be

determined with a high degree of certainty. A high degree of certainty requires the operator to show that:

(a) the reported data is free of inconsistencies;

(b) the collection of the data has been carried out in accordance with the applicable scientific standards; and

(c)

the relevant records of the installation are complete and consistent.

4. The verifier shall be given access to all sites and information in relation to the subject of the verification.

5. The verifier shall take into account whether the installation is registered under the Community eco-management

and audit scheme (EMAS).

Methodology

Strategic analysis

6. The verification shall be based on a strategic analysis of all the activities carried out in the installation. This requires

the verifier to have an overview over all the activities and their significance for emissions.

Process analysis

7. The verification of the submitted information shall, where appropriate, be carried out on the site of the installation.

The verifier shall use spot-checks to determine the reliability of the reported data and information.

Risk analysis

8. The verifier shall submit all the sources of greenhouse gas emissions in the installation to an evaluation with regard

to the reliability of the data of each source contributing to the overall emissions of the installation.

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9. On the basis of this analysis the verifier shall explicitly identify those sources with a high risk of error and other
aspects of the monitoring and reporting procedure which are likely to contribute to errors in the determination of
the overall emissions. This especially involves the choice of the emission factors and the calculations necessary to
determine the emissions of single sources of emissions. Particular attention shall be given to those sources with a
high risk of error and those aspects of the monitoring procedure.

10. The verifier shall take into consideration any effective risk control methods applied by the operator with a view to

minimising the degree of uncertainty.

Report

11. The verifier shall prepare a report on the validation process stating whether the report pursuant to Article 14(3) is
satisfactory. This report shall specify all
issues relevant to the work carried out. A statement that the report
pursuant to Article 14(3) is satisfactory may be made if, in the opinion of the verifier, the total emissions are
not materially misstated.

Minimum competency requirements for the verifier

12. The verifier shall be independent of the operator, carry out his activities in a sound and objective professional

manner, and understand:

(a) the provisions of this Directive, as well as relevant standards and guidance adopted by the Commission pursuant

to Article 14(1);

(b) the legislative, regulatory, and administrative requirements relevant to the activities being verified; and

(c)

the generation of all information related to each source of emissions in the installation, in particular, relating to
the collection, measurement, calculation and reporting of data.