WRITTEN QUESTION E-2790/03 by Eija-Riitta Korhola (PPE-DE) to the Commission. Banking rules in EU emissions trading: invariability of AAU (BSA) amounts.
Date: 2003-09-19
Institutions: European Parliament, Provisional data
Subjects: Council of the European Union, EC Directive, EU environmental policy, degree of pollution, greenhouse gas, industrial pollution, reduction of gas emissions, tradeable emission permit

27.3.2004

EN

Official Journal of the European Union

C 78 E/429

(2004/C 78 E/0448)

WRITTEN QUESTION E-2790/03

by Eija-Riitta Korhola (PPE-DE) to the Commission

(19 September 2003)

Subject: Banking rules in EU emissions trading: invariability of AAU (BSA) amounts

Under the EU emissions trading directive (not yet published in the Official Journal) national decisions
concerning the possibility for operators to bank emission allowances will be permitted during the time
span covering the EU internal emissions trading period (2005-2007) and the first Kyoto period
(2008-2012). In every Member State there may be companies which, prompted by substantial fluctuations
in their annual output, for example, might wish to bank emission allowances even if they were prohibited
from doing so in their home country. This creates an incentive to transfer the allowances in question
temporarily to another Member State.

However, cross-border transfers during the internal emissions trading period will not lead to changes in the
emission allowance (AAU or BSA amount) allocated to an individual country, contrary to what will
happen from the beginning of the first Kyoto period.

Does the Commission consider it a problem that a transfer to another country purely for banking purposes
and back again from that country to the country of origin in the Kyoto period will unfairly alter the
aggregate emission allowances of the country which has allowed banking and enable the emission
allowance to be doubled in the country of origin as far as the banked amount is concerned? Should the
rules on adjustment of AAU and BSA amounts be revised when the EU emissions trading directive is
reviewed in 2004 or 2006, before the first transfers are made between Member States for banking
purposes?

(2004/C 78 E/0449)

WRITTEN QUESTION E-2791/03

by Eija-Riitta Korhola (PPE-DE) to the Commission

(19 September 2003)

Subject: Problem of double accounting in emissions trading

From 2008 national AAU (BSA) amount will be adjusted to take account of cross-border transfers of
emission allowances so as to ensure that a selling country’s AAU (BSA) amount is decreased and that of
the buying country increased by the quantity transferred. The selling country’s authorities will
correspondingly have that much less to allocate in the next emissions trading period. Given that the
authorities presumably cannot treat firms differently, according to whether they sell emission allowances
within their home country or beyond its borders, a seller’s emission allowance in the next period should
logically be reduced in every case. This would also be consistent with the principle that emission
reductions should be taken into account only once.

However, a firm can choose between the strategies of selling and banking emission allowances so as to
derive greatest benefit. If a firm is able to bank its emission allowance in order to secure a better
(or unchanged) share in the next period, the authorities should treat firms which have banked emission
allowances and firms which have sold them in the same way and hence in both cases deduct the amounts
sold or banked from their new initial allocations (unless allowances have been banked purely because of
fluctuations in a firm’s output for reasons related to the business cycle). Otherwise it would be in a firm’s
interest to postpone selling and bank emission allowances, in which case it would obtain twice as much to
sell in the next period.

Does the Commission see a problem as regards equal treatment of firms? Should the Member States all
give instructions for the amounts of emission allowances banked or sold to be deducted from the next
allocations for the firms concerned, thus ensuring that the problem of double accounting would not arise?
Should this matter be raised when the directive is reviewed?