2006/780/EC: Commission Decision of 13 November 2006 on avoiding double counting of greenhouse gas emission reductions under the Community emissions trading scheme for project activities under the Kyoto Protocol pursuant to Directive 2003/87/EC of the European Parliament and of the Council (notified under document number C(2006) 5362)   (Text with EEA relevance)

16.11.2006 EN Official Journal of the European Union L 316/12
COMMISSION DECISION
of 13 November 2006
on avoiding double counting of greenhouse gas emission reductions under the Community emissions trading scheme for project activities under the Kyoto Protocol pursuant to Directive 2003/87/EC of the European Parliament and of the Council
(notified under document number C(2006) 5362)
(Text with EEA relevance)
(2006/780/EC)
THE COMMISSION OF THE EUROPEAN COMMUNITIES
,
Having regard to the Treaty establishing the European Community,
Having regard to Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC (1), and in particular Article 11b(7) thereof,
Whereas:
(1) In order to ensure the environmental integrity of the Community emissions trading scheme, Directive 2003/87/EC requires the Member States to ensure that when hosting project activities as established under the flexible mechanisms of the Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC), no emission reduction units (ERUs) or certified emission reductions (CERs) are issued for reductions or limitations of greenhouse gas emissions that take place in installations that participate in the Community emissions trading scheme, as this would result in a double counting of emission reductions or limitations.
(2) Such reductions or limitations could in particular occur if: a project activity for fuel switching occurs in an installation falling under the Community emissions trading scheme, if a project activity in the municipal heat generation sector results in a lower production in another installation under the Community emissions trading scheme; or, if a project activity for a wind- or hydropower plant feeds electricity into the electricity grid, thereby replacing fossil fuel-based electricity generation.
(3) Recognising that Member States might have committed themselves before the adoption of Article 11b(2) of Directive 2003/87/EC to issuing ERUs or CERs that result in double counting, Article 11b(3) and (4) allow ERUs and CERs to be issued until 31 December 2012, even if the reductions or limitations of the project activities indirectly or directly reduce or limit the emissions of installations that fall under the Community emissions trading scheme, provided that an equal number of allowances is cancelled.
(4) Article 11b(3) and (4) of Directive 2003/87/EC differentiates between instances where it is possible to determine the extent of reductions or limitations in each installation under the Community emissions trading scheme that is affected by the project activity (direct reductions or limitations) and instances where the extent of reductions or limitations can only be determined for a group of installations under the scope of the Community emissions trading scheme (indirect reductions or limitations).
(5) For direct reductions or limitations, the operator of the installation where the reduction or limitation occurs is responsible for the cancellation of allowances corresponding to the quantity of ERUs and CERs issued for such reductions or limitations For indirect reductions or limitations, the national authorities are responsible for cancelling these allowances in the national registry of the Member State that issues the ERUs and CERs.
(6) The most appropriate way to account for reductions or limitations in an installation falling under the Community emissions trading scheme that result from a particular project activity is to calculate the share of such reductions or limitations within the total planned emission reductions or limitations of this project activity, as established by its approved baseline. If, in the case of indirect reductions or limitations, the quantity of reductions in individual installations falling under the Community emissions trading scheme cannot be identified exactly, the quantity of reductions or limitations within the total reductions or limitations of the project activity that would cause double counting should be estimated.
(7) The Community emissions trading scheme requires Member States to notify to the Commission the total quantity of allowances intended to be allocated for the 2008-2012 period in their national allocation plans 18 months in advance of the start of the period. The precise amount of emission reductions or limitations generated by a particular project activity is, however, established annually after these have taken place.
(8) A set-aside should be established in the national allocation plan for the period 2008 to 2012 of each Member State hosting activities under the project-based mechanisms of the Kyoto Protocol which could cause double-counting, listing each approved project activity and its anticipated reductions or limitations of emissions that take place in installations that participate in the Community emissions trading scheme and for which ERUs or CERs should be issued by the Member State (‘trading sector project-reductions’). In addition, the set-aside table should contain all explanatory information needed to establish the extent of ‘trading sector project-reductions’ anticipated for each project activity being hosted by the Member State.
(9) Another set-aside should be established in the national allocation plan for the period 2008 to 2012 of each Member State intending to host activities under the project-based mechanisms of the Kyoto Protocol which could cause double-counting, listing planned project activities and its anticipated reductions or limitations of emissions that take place in installations that participate in the Community emissions trading scheme and for which ERUs or CERs should be issued by the Member State (‘trading sector project-reductions’). In addition, the set-aside table should contain all explanatory information needed to establish the extent of ‘trading sector project-reductions’ anticipated for planned project activities to be hosted by the Member State.
(10) ERUs or CERs that represent ‘trading sector project-reductions’ may be issued up until 31 December 2012. Each such issuance should be notified to the Commission.
(11) In their national allocation plans, Member States hosting, or intending to host, activities under the project-based mechanisms of the Kyoto Protocol which could cause double-counting should indicate the projected emissions for activities falling under the scope of Directive 2003/87/EC both with and without the effects of the anticipated trading sector project-reductions.
(12) Member States should take into consideration any anticipated reductions or limitations caused by project activities that affect an installation or activity and would cause double counting when establishing their national allocation plan methodology for determining the allocation of individual installations.
(13) The measures provided for in this Decision are in accordance with the opinion of the Climate Change Committee,