Opinion of the Commission pursuant to Article 251 (2), third subparagraph, point (c) of the EC Treaty, on the European Parliament's amendments to the Council's common position regarding the 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 amending the proposal of the Commission pursuant to Article 250 (2) of the EC Treaty
Date: 2003-07-18
Institutions: European Commission
Subjects: EU environmental policy, greenhouse gas, polluter pays principle, reduction of gas emissions, tradeable emission permit

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 18.07.2003
COM(2003) 463 final

2001/0245 (COD)

OPINION OF THE COMMISSION

pursuant to Article 251 (2), third subparagraph, point (c) of the EC Treaty,
on the European Parliament's amendments
to the Council's common position regarding the
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

AMENDING THE PROPOSAL OF THE COMMISSION
pursuant to Article 250 (2) of the EC Treaty

2001/0245 (COD)

OPINION OF THE COMMISSION

pursuant to Article 251 (2), third subparagraph, point (c) of the EC Treaty,
on the European Parliament's amendments
to the Council's common position regarding the
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

1.

BACKGROUND

The Proposal COM(2001)581 final1 was transmitted to the European Parliament and
the  Council  on  23  October  2001  in  accordance  with  the  co-decision  procedure
pursuant to Article 175(1) of the EC Treaty.

The Committee of Regions gave its opinion on 14 March 20022.

The Economic and Social Committee gave its opinion on 29 May 20023.

The  European  Parliament  gave  its  opinion  at  the  first  reading  in  session  on  10
October 2002.

Following the opinion of the European Parliament and pursuant to Article 250(2) of
the EC Treaty, the Commission amended its Proposal by COM(2002)680 final4 and
transmitted this to the European Parliament and the Council on 27 November 2002.

The  Council  reached  unanimous  political  agreement  on  a  Common  Position  on  9
December 2002. The Council adopted the Common Position formally on 18 March
2003.

On  2 July  2003,  the  European  Parliament  adopted  seventeen  amendments  to  the
Council’s common position at second reading.

This  opinion  presents  the  Commission’s  position  on  the  European  Parliament’s
amendments pursuant to Article 251(2)(c) of the EC Treaty.

2.

PURPOSE OF THE COMMISSION PROPOSAL

The general objective of the proposed Directive is to create a scheme for greenhouse
gas  emission  allowance  trading  within  the  Community  by  establishing  an  EU

1

2

3

4

OJ C 75 E, 26.03.2002, p. 33.
OJ C 192, 12.08.2002, p.59.
OJ C 221, 17.09.2002, p.27.
Not yet published in the Official Journal

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framework  and  ensuring  an  EU-wide  market  for  emission  allowances.  Such  an
instrument  is  a  cornerstone  in  the  Commission’s  strategy  for  reaching  the  Kyoto
target  in  the  most  cost-effective  way.  Emissions  trading  will  reduce  the  cost  of
emission reductions by ensuring that these reductions are made where they are least
costly. At the same time, emissions trading is environmentally effective by achieving
a  pre-determined  emission  reduction  from  the  activities  covered.  The  proposal
ensures  the  proper  functioning  of  the  internal  market  and  avoids  unacceptable
distortions of competition.

The  Directive  is  particularly  important  to  ensure  that  legal  commitments  to  reduce
greenhouse gas emissions pursuant to the Kyoto Protocol, which was ratified by the
European  Community5  and  its  Member  States  on  31  May  2002,  are  fulfilled  more
cost-effectively.

3.

COMMISSION OPINION ON THE PARLIAMENT’S AMENDMENTS

3.1.

Summary of the Commission’s position

The  Commission  can  accept  the  European  Parliament’s  seventeen  amendments  in
full.  It  considers  that  the  principal  aims  of  the  EC  emissions  trading  scheme  are
safeguarded by the compromise package that these amendments constitute.

3.2.

Parliament amendments at second reading

3.2.1.

Amendments accepted

3.2.1.1. Amendment 28 (new recital 7a)

Amendment  28  is  a  clarification  of  Annex  III  (3)  of  the  Common  Position  and  as
such it is acceptable to the Commission.

3.2.1.2. Amendment 29 (recital 14)

Amendment  29  clarifies  that  other  greenhouse  gases  and  other  installations  can  be
included by Member States from 2008, and is acceptable to the Commission.

3.2.1.3. Amendments 30 and 41 (recital 18 and Article 30(3))

These amendments are acceptable to the Commission. The first sentence in recital 18
derives  from  the  Common  Position,  while  the  second  sentence  and  the  addition  to
Article 30 paragraph 3 are taken directly from the Marrakech Accords and therefore
reflect  an  existing  commitment  of  the  European  Community  and  all  its  Member
States (UNFCCC Decision 15/CP.7).

3.2.1.4. Amendment 31 (recital 19a)

This amendment is acceptable to the Commission, as the emission trading Directive
will  encourage  the  use  of  more  energy  efficient  technologies,  including  combined

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Council Decision 2002/358/EC of 25 April  2002  concerning  the  approval,  on  behalf  of  the  European
Community, of the Kyoto Protocol to the United Nations  Framework  Convention on  Climate  Change
and the joint fulfilment of commitments thereunder, OJ L 130, 15.05.2002, p.1.

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heat  and  power  technology,  while  Directive  2003/…/EC  [  of  …  concerning  the
promotion of CHP] will specifically promote combined heat and power technology.

3.2.1.5. Amendment 32 (recital 23)

Amendment  32  is  acceptable  as  the  Commission  is  committed  to  ensuring  that  the
transport sector makes a substantial contribution to the Community and its Member
States meeting their climate change obligations under the Kyoto Protocol. Moreover,
the  reference  in  the  recital  does  not  infringe  upon  the  Commission’s  right  of
initiative.

3.2.1.6. Amendment 33 and 35 (new recital 26a and Article 22)

These amendments are acceptable to the Commission, as they provide for key criteria
for  the  national  allocation  plans  to  be  amended  only  through  co-decision,  while
sufficiently  flexibility  is  maintained  for  other  criteria  to  be  amended  through
comitology.

3.2.1.7. Amendment 34 (Article 10)

This amendment is acceptable to the Commission because it is a central element of
the agreement between the European Parliament and Council enabling agreement to
be  reached  at  second  reading,  and  enabling  swift  implementation  of  the  emissions
trading  scheme.  The  level  of  auctioning  allowed  in  the  period  2005-7  is  half  that
which Member States would be able to use in the period 2008-12.

3.2.1.8. Amendment 36 and 37 (Article 27(1) and (2))

These  amendments  are  acceptable  to  the  Commission  because  its  consideration  of
Article 27 is not changed by the deletion of the words “certain” and “and activities”.
When a group of installations qualify under this Article, they will do so subject to the
conditions  of  paragraph  2  being  fulfilled,  subsequent  to  which  the  Commission
would  provide  for  the  temporary  exclusion  of  those  installations  from  the
Community scheme.

3.2.1.9. Amendment 17 (Article 29(1a))

The  Commission  can  accept  this  amendment,  while  noting  the  difficulty  of
identifying possible cases of force majeure in advance.

3.2.1.10.Amendment 38 (Article 30(2)(a))

This amendment is acceptable to the Commission since the  reference in the review
clause does not infringe upon the Commission’s right of initiative.

3.2.1.11.Amendment 39 (Article 30(2)(c))

This amendment is acceptable to the Commission since text in the review clause is
not prejudicial to future Commission proposals.

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3.2.1.12.Amendment 40 (Article 30(2)(new ja))

Emissions trading is an instrument that does not need technology standards, but lets
operators  decide  which  technologies  they  use.  However,  it  is  acceptable  to  the
Commission to examine the feasibility of EU-wide benchmarks based on BAT being
developed as a basis for allocation.

3.2.1.13.Amendment 42 (Annex III point 1)

This amendment is acceptable to the Commission. It contains qualitative text which
limits  the  total  quantity  of  allowances  to  no  more  than  is  needed  for  the  strict
application of Annex  III  criteria.  It  also  includes  additional  text  which  requires  the
total  quantity  for  the  period  2005-07  to  be  consistent  with  achieving  the  Member
State's Kyoto obligation in the period 2008-12. These changes are acceptable to the
Commission since they further clarify existing Annex III criteria.

3.2.1.14.Amendment 43 (Annex III, point 7)

The  Commission  can  accept  this  amendment  since  it  clarifies  existing  criteria  in
Annex  III,  and  does  not  impose  additional  requirements  on  Member  States.  This
amendment clarifies the possible link between benchmarking and early action, which
was a particular concern for the Parliament.

4.

CONCLUSION

Pursuant  to  Article  250(2)  of  the  EC  Treaty,  the  Commission  is  amending  its
proposal as indicated above.

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