••••
electricity and heat productioniron and steelreﬁningchemicalsglass, pottery and building materialspaper and printing.
It was acknowledged that member-states differed with regard to interest in emissionstrading, and the possibility of ‘opt-in’ (of those most interested) and ‘opt-out’ (ofreluctant member-states or particular sectors) was noted. Opt-out for member-stateswould in reality mean a voluntary ET system.As to the method of allocation, it was indicated that auctioning was technicallypreferable, and that ‘free allocation … should not necessarily be considered an easy
20 European Commission (8 March 2000a), COM(2000)87 ﬁnal, Green Paper onGreenhouse Gas Emissions Trading within the European Union (Brussels).21 Ibid., 6.22 Ibid., 8.23 Ibid., 9.24 Ibid., 10.
40
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option’.25 With regard to compliance and enforcement, it was noted that the strengthand environmental integrity of any emissions trading regime would depend largelyupon its compliance provisions and a robust enforcement regime. The existence ofstrict penalties would have a deterrent effect: such penalties should ‘signiﬁcantly’exceed the cost of complying.26In addition to speciﬁc design issues, the Green Paper included various aspectsof harmonization between the Community and the member-states. In principle,EU emissions trading could be organized at several levels, with varying degrees ofCommunity intervention. A trade-off was noted between providing high equality oftreatment and simplicity on the one hand and high member-state autonomy on theother. The latter could lead to segregation, which would run counter to the objectivesof the internal market.27 The Green Paper outlined several options concerning the‘level of possible diversity within the Community’. A system with coverage agreedat Community level would provide optimal conditions for equal competition. Inthe same context of harmonization, concerning the allocation of allowances (thequantity of greenhouse gas emissions assigned to each participant in the system), animplicit plea was made for a centralized setting of the national ceilings or ‘caps’.28A more decentralized approach would require ‘detailed and tight guidelines on howallocations are made in individual sectors and companies, and close scrutiny ofevery single case’. Also discussed was the synergy with other policies and measures,including the IPPC Directive, voluntary agreements, and energy taxation. Withregard to the relationship between emissions trading and the IPPC Directive, theGP noted that some clariﬁcations were required but that no major problems wereenvisaged.29Summing up this phase of initiation, the ﬁrst positive signals about emissionstrading started to come out of the European Commission in late spring 1998.Initially the discussion was geared towards the role of the EU in relation to theglobal ﬂexibility mechanisms under the Kyoto Protocol. However, it is important tonote that the idea of a pilot, EU-internal scheme for emissions trading was launchedalready in the June 1998 Communication on an EU post-Kyoto strategy. This canbe linked to the weight given in this Communication to the EU being able to showdemonstrable climate policy progress by 2005, as called for in the Kyoto Protocol.Discussions of a possible internal EU emissions trading system were taken a bitfurther in the May 1999 Communication on preparing for the implementation of theKyoto Protocol. As its main new element, this Communication launched the ideathat such a system should initially have basically narrow coverage, targeting large25 Ibid., 18–19.26 Ibid., 24.27 Ibid., 12.28 See the statement that ‘If the Community were to agree on the quantity of emissions ofthe trading sectors in each Member State, possible distorting allocations to individual sectorsor companies would be signiﬁcantly limited’. European Commission (8 March 2000a),COM(2000)87 ﬁnal, Green Paper on Greenhouse Gas Emissions Trading within the EuropeanUnion (Brussels), 18.29 European Commission (8 March 2000a), COM(2000)87 ﬁnal, Green Paper onGreenhouse Gas Emissions Trading within the European Union (Brussels), 21.
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emitters or a single economic sector, and only CO2 (as noted, the most measurablegas). Issues of harmonization and degree of centralized control were ﬂoated only ingeneral terms.These issues were then taken a signiﬁcant step further in the March 2000ETS Green Paper. Reading both the actual text and between the lines, it must beconcluded that the Commission made a plea for a quite centralized and henceharmonized system for determining the crucially important emission ceilings/capswithin the system, emphasizing the substantial institutional challenges that a moredecentralized approach would entail. The suggested coverage of the system wasin line with the 1999 Communication, but, with reference to the LCP and IPPCDirectives, six sectors were now singled out, with electricity and heat production byfar the largest.Decision-making: From Proposals to DirectivesIn this section we ﬁrst sum up main elements of the Commission’s ET directiveproposal, launched in October 2001. The second section documents and discussesthe main changes in the form and content of the Commission’s proposal whichemerged from the ﬁnal agreement between the Council and the Parliament at the endof June 2003. As this June agreement left the link between the EU Emissions TradingScheme and the Kyoto ﬂexibility mechanisms to be further speciﬁed in a subsequentamending directive, the third section sums up the main specifying elements thatemanated from the agreement on the Linking Directive in April 2004.The Commission’s ET ProposalWhat speciﬁc design choices were made in the European Commission’s Proposalfor a Directive establishing a scheme for greenhouse gas emission allowancetrading within the Community and amending Council directive 96/61/EC,30 seen inlight of the various options discussed in the Green Paper? Let us ﬁrst note that theproposal was based on Article 175 (1) of the Treaty, which required adoption by aqualiﬁed majority in the Council and co-decision with the European Parliament.31The proposal built on responses to the Green Paper and on extensive consultationwith stakeholders.Regarding the questions of harmonization and degree of centralized control, theoverall approach tended to favour decentralization. The proposal stated that ‘thequantities of allowances issued would not be harmonised’ and ‘the total quantityof allowances issued under the proposal would be left essentially to the Member
30 European Commission (23 October 2001), COM(2001)581, Proposal for a Directiveof the European Parliament and of the Council Establishing a Framework for GreenhouseGas Emissions Trading within the European Community and Amending Council Directive96/61/EC (Brussels).31 In contrast, the carbon/energy tax proposals had been put forward under theconsultation procedure (now Article 175(2)), which requires unanimity in the Council.
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States’.32 The Commission related this to the varying emission reduction obligationsin the EU Burden-sharing Agreement and differences in sources of emissions andfuel mixes in different member-states. However, the need for a certain degree ofharmonization and central control was also emphasized. Member-state allocationsshould be based on several common criteria; these allocations should be communicatedto the Commission, and could be rejected if the criteria were not observed, includingalso Community requirements concerning state aid.33 This meant that the individualand collective reduction ambitions would become clearer only after the process ofdrawing up NAPs was well underway. As we shall see in Chapter 5, the criteriaconstraining national allocations became subject to intense negotiations between theEuropean Parliament and the EU member-states.Concerning coverage, a mandatory system for all member-states was proposed,with no possibilities to add or exempt sectors or installations. The proposal followedup the idea launched in the Green Paper of initially targeting only CO2, noting thatthis would be ‘capable of generating good quality monitoring data on a consistentbasis’.34 Moreover, as also indicated in the Green Paper, only large point sourceswere to be included. Sectoral coverage was almost the same as in the Green Paper,but now organized in the form of four main ‘activities’:••••
energy;production and processing of ferrous metals;mineral industry;other activities35
The main difference from the Green Paper was that the chemicals sector was notincluded in this proposal.On allocation and allocation method, since the member-states would have nolegally binding targets limiting GHG emissions in the pilot phase (2005 to end2007), allowances should be allocated free of charge. Such a common approachwould protect the internal market. The allocation method in future commitmentperiods would be decided on the basis of a June 2006 review of experiences.36 Initial
32 European Commission (23 October 2001), COM(2001)581, Proposal for a Directiveof the European Parliament and of the Council Establishing a Framework for GreenhouseGas Emissions Trading within the European Community and Amending Council Directive96/61/EC (Brussels), 5, 1133 Ibid., 5–6, 11.34 Ibid., 9.35 ‘Energy activities’ included combustions installations with a rated thermal inputexceeding 20MW, mineral oil reﬁneries, and coke ovens. ‘Production and processing offerrous metals’ included metal ore and installations for the production of pig iron or steel.‘Mineral industry’ included installations for the production of cement clinker, installations forthe manufacture of glass, and installations for the manufacture of ceramic products. ‘Otheractivities’ included industrial plants for the production of pulp and paper and board. SeeAnnex I of the proposal (p.32).36 European Commission (23 October 2001), COM(2001)581, Proposal for a Directiveof the European Parliament and of the Council Establishing a Framework for Greenhouse
Development of the EU ETS
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allocations should be based on the ET Directive and the aforementioned criteria andthe 1998 Burden-sharing Agreement.Compliance and enforcement guidelines were put forward, and it was proposedto leave it to the discretion of member-states whether emissions veriﬁcation shouldbe done by their competent authorities or through independent veriﬁers. In the pilotphase, a penalty for non-compliance of €50 (or twice the average market price) perton CO2 emitted above allocated quantity was suggested; this penalty increasing to€100 in the ﬁrst Kyoto Protocol commitment period.37New issues were also included in the proposal. The proposal suggested thatmember-states should be free to decide whether to allow banking of allowancesfrom the period ending in 2007 and that starting in 2008. As from 2008, however,it was suggested that they should be required to allow ‘banking’ of allowancesfrom one ﬁve-year period to the next.38 The Commission did not want to stipulatehow the market in emissions allowances was to be organized; this was to be leftopen to solutions driven by the private sector.39 Links with other emissions tradingschemes and renewable certiﬁcates were generally welcomed. Concerning the linksto ﬂexibility mechanisms under the Kyoto Protocol, their eventual inclusion wasdesirable, on condition that outstanding issues regarding their environmental integritycould be solved. However, due to uncertainty about the rules of these mechanisms, aseparate subsequent linking proposal was suggested.40Agreement between the Council and the ParliamentAs will be speciﬁed and discussed in Chapter 5, the further main dynamics of thedecision-making process unfolded as follows: the European Parliament started itsﬁrst reading process in the spring of 2002 and adopted its plenary position on 10September 2002. Some 80 suggested amendments to the directive proposal wereadopted, involving signiﬁcant changes to the coverage and the allocation mechanismof the system. This was followed by discussion on and adoption of a Council CommonPosition on the ET Directive on 9 December 2002. Here a main outcome was that theCouncil chose to uphold the body of the Commission’s proposed design.The second reading process then started in late spring of 2003, and the Parliament’sEnvironment Committee adopted its main position on 11 June 2003. The Committeedecided to re-table 25 of the amendments put forward in the ﬁrst reading process,singling out four especially central issues, including a substantial broadening ofGas Emissions Trading within the European Community and Amending Council Directive96/61/EC (Brussels), 11.37 Ibid., 14.38 Ibid., 12. Banking means to carry over allowances from one commitment period to thenext.39 European Commission (23 October 2001), COM(2001)581, Proposal for a Directiveof the European Parliament and of the Council Establishing a Framework for GreenhouseGas Emissions Trading within the European Community and Amending Council Directive96/61/EC (Brussels), 16.40 Ibid., 17. The Marrakech agreement between the UNFCCC parties on the internationalﬂexible mechanisms was concluded shortly after the Commission proposal.
44
EU Emissions Trading
the coverage of the scheme and a signiﬁcant portion of auctioning. The plenarydiscussion and vote in the Parliament were scheduled to take place in the beginningof July. However – and this clearly signiﬁed the urgency surrounding this issue, andreﬂected hopes from all sides that the potentially long conciliation procedure couldbe avoided – negotiations between the EP and the Council were initiated rapidlyafter the vote in the Environment Committee, with a deadline of 20 June. Followingcompromise proposals tabled on 23 June by EU member-state representatives, thenegotiations were crowned with success on 25 June and formalized in a subsequentprocess in July.The Parliament accepted the outcome of the negotiations in plenary on 2 July,also adopting 17 amendments, mostly minor clariﬁcations.41 Only four votes werecast against the ET Directive at this ﬁnal reading in Parliament (Vis 2006a, 40). On 18July 2003, the Commission expressed its formal opinion on the outcome, discussingand – probably not so surprisingly – accepting the 17 amendments adopted by theParliament on 2 July.42 The Council formally adopted the directive on 22 July 2003.As the ﬁnal step in this part of the story, the ET Directive became formal EU lawwhen it was published in the EU Ofﬁcial Journal on 25 October 2003.43 Let us nowturn to the main outcome and the extent to which the Commission proposal wasupheld or altered.Starting with the issue of harmonization and degree of centralized control, the ﬁnaloutcome was generally in line with the Commission proposal, with a fundamentallydecentralized approach to setting emission caps (see Article 9 in the ET Directive).However, unlike the Commission proposal, the criteria for national allocation planswere speciﬁed in Annex III of the Directive. In particular it was stipulated in the ﬁrstcriterion that, prior to 2008, the total quantity of allowances to be allocated shouldbe consistent with a path towards achieving or over-achieving each member-state’sEU Burden-sharing Agreement or Kyoto Protocol target. The 10 new member-statesthat joined the EU as of 1 May 2004 were not parties to the 1998 Burden-sharingAgreement, but had obligations under the Kyoto Protocol.As to coverage, the Commission proposed a quite narrow and limited initialsystem, targeting only CO2 and with ‘energy activities’ representing by far the mainpart of regulatory action. Again, overall, the ﬁnal outcome was very much in line withthe Commission proposal, with the ‘activities’ and greenhouse gases lists (provided41 European Parliament (2 July 2003), Greenhouse Gas Emission Allowance Trading,European Parliament Legislative Resolution on the Council Common Position with a View toAdopting a European Parliament and Council Directive Establishing a Scheme for GreenhouseGas Emissions Allowance Trading within the Community and Amending Council Directive96/61/EC (15792/2002-C5-0135/2003-2001/0245 (COD), P5_TA(2003)0319.42 European Commission (18 July 2003), COM(2003)463 ﬁnal, Opinion of theCommission pursuant to Article 251 (2), third subparagraph, point (c) of the EC Treaty, on theEuropean Parliament’s amendments to the Council’s common position regarding the proposalfor a Directive of the European Parliament and of the Council establishing a scheme forgreenhouse gas emission allowance trading within the Community and amending CouncilDirective 96/61/EC (Brussels).43 ENDS Daily (30 October 2003), ‘EU Emissions Trading Law Enters into Force’, Issue1542.
Development of the EU ETS
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in Annex I and II of the Directive) virtually identical to those in the proposal fromthe Commission. It also outlined a mandatory system, with no explicit loopholes thatwould allow exempting or adding installations or sectors.However, a ﬁrst change was an opening up for a temporary (in the pilot phase)exemption or opt-out of ‘certain installations’, on speciﬁed conditions (Article27). A second change was the opening up for unilateral inclusion of additionalactivities (‘opt-in’) in Article 24. In the pilot phase, member-states were permitted toindividually extend the EU ETS to installations below the capacity limits set in theDirective. From 2008, broader possibilities for individual extension were indicated,both to installations below the established capacity limits and not even includedin Annex I to the Directive – however, on speciﬁed conditions and overseen bythe Commission. A third change was the opening up for ‘pooling’ of installations(Article 28). Member-states could allow operators of installations carrying out one ofthe relevant activities covered by the Directive to form a group/pool of installationsfrom the same activity, and nominate a trustee to be responsible for surrenderingallowances and be subject to possible penalties. Finally, a slight change in relationto the proposal was that three sectors – chemicals, aluminium and transport – werementioned as speciﬁc candidates for future inclusion in the system, to be furtherdiscussed in a review report to be submitted to the Commission by 30 June 2006(Article 30, 2).As to the issue of allocation and allocation mechanism, the Commission basicallyproposed that allowances should be allocated free of charge, and the June 2006review was to re-think the allocation method in future commitment periods. Theﬁnal outcome was a slightly modiﬁed version of the Commission proposal, with atleast 95 per cent of the allowances to be allocated free of charge prior to 2008 and atleast 90 per cent thereafter (Article 10).With regard to compliance and enforcement, as a central element the Commissionhad proposed a penalty for non-compliance of €50 (or twice the average marketprice) per ton CO2 emitted above allocated quantity in the pilot phase, increasing to€100 in the ﬁrst Kyoto Protocol commitment period. The ﬁnal outcome was againa slightly modiﬁed version of this proposal. Two slight changes can be noted in theformulation of Article 16: the penalty level in the pilot phase was adjusted downto €40; and the possibility of a more ﬂexible alternative penalty level linked to theaverage market price was removed.Finally, as to the external links to the Kyoto ﬂexibility mechanisms, theCommission proposal merely noted that their eventual inclusion was desirable,but due to uncertainty about the rules of these mechanisms, a separate subsequentlinking proposal was suggested. The ﬁnal outcome supported this basic sequencingof the process. However, Article 30 also contained a certain further speciﬁcationof the nature of the link, by emphasizing that the use of the mechanisms should besupplemental to domestic action. How the link to the Kyoto mechanisms was furtherspeciﬁed in the subsequent Linking Directive is summed up in the next section.The ﬁnal political agreement on the EU Emissions Trading Scheme shows thatthe main shape and content of the proposed directive remained intact through thecomplicated EU decision-making process. However, it also shows that variousinterests were able to affect the ﬁnal outcome of the ET Directive, including ‘opt-
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in’ and ‘opt-out’ clauses, pooling, and a reduced penalty level of €40. A core taskin Chapter 5 is to examine which actors and institutions affected the ﬁnal outcome,how they did so, and why.The Linking DirectiveOn 23 July 2003, only a day after the Council of Ministers rubber-stamped the mainET Directive, the Commission presented its proposal for a linking directive.44 Asindicated, the objective of this directive was to specify the link between the EUEmissions Trading Scheme and the other two ﬂexible mechanisms born out of theKyoto Protocol – the JI and the CDM.45There were many reasons why the Commission had omitted the question oflinking from its 2001 ET directive proposal. In addition to incomplete internationalrules for the ﬂexible mechanisms, a perhaps more important reason for not includinga link in the ET Directive was that the ETS was intended as a domestic measure, andmany argued that a link would compromise this intent. Furthermore, it was felt thata link might jeopardize the adoption of an ET directive altogether, because of thevery differing views on the project mechanisms (Lefevere 2006, 122). The proposalfor a separate linking directive contained the following main features related to cap,timing and restrictions:46•
•
•
A review of the imports of JI/CDM credits should take place once it reached6 per cent of the total quantity of member-states allowances. A ﬁnal cap couldbe set at ‘for example 8%’.It was suggested that the Directive should be dependent on the Kyoto Protocolentering into force. This meant waiting until the ﬁrst Kyoto commitmentperiod (beginning in 2008), before any CDM credits could be actually used.Neither sinks (i.e. forestry projects) nor nuclear power should be includedas eligible projects. Hydropower was recognized as a legitimate source forprojects, as long as such projects took account of ‘environmental and socialimpacts’.47
44 European Commission (23 July 2003), COM (2003)403, Commision Proposal for aDirective of the European Parliament and of the Council amending the Directive establishinga scheme for greenhouse gas emission allowance trading within the Community, in respectof the Kyoto Protocol’s project mechanisms (Brussels). Available at <http://www.climnet.org/pubs/PropDirectiveJICDM.pdf> accessed 22 May 2007.45 It should be noted that an indirect link between the ETS and the project mechanismsalready existed: During the Kyoto period 2008–12, member-states would be able to buyCDM and JI credits in order to meet their Kyoto commitments. The Linking Directive would,however, provide a direct link, allowing business entities operating within the ETS to buysuch credits themselves (see Lefevere 2006, 129).46 Besides the ones listed, the proposal contained other important points as well, suchas the issue of avoiding double counting of credits, and the inclusion of ‘national projectactivities’. Space limitations prevent us from taking all these issues into account here.47 European Commission (23 July 2003), COM (2003) 403, pp. 7–11, CommisionProposal for a Directive of the European Parliament and of the Council amending the Directive
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The proposal, however, gave rise to a storm of protests. On the one side stood industry,wanting minimal restrictions on the linking; on the other stood environmentalorganizations, fearing that the Linking Directive would leave Third World countrieswith a bad deal and the globe with a deteriorated climate. Among EU member-statesviews were varied, leading to lively discussions in the Council and the EuropeanParliament. Main disputes centred on timing, the quantitative cap and the qualitativerestrictions. On 5 April 2004, the Parliament’s Rapporteur, the Irish Presidency andthe Commission reached informal agreement on a compromise package, reﬂecting atrade-off between the quantitative provisions (the cap) and the qualitative provisions(sinks and hydropower):•
••
Gone was the stipulated, common cap. Limits would be ‘speciﬁed by eachMember-state’ (Article 11a). However, in section 7 of the directive, it wasrepeated that the use of the mechanisms should be supplemental to domesticaction and should also constitute ‘a signiﬁcant element of the effort made’.The Directive was no longer dependent on the Kyoto Protocol entering intoforce, and CDM credits could be used from January 2005 (Section 5).Nuclear projects and sinks were excluded only temporarily. Nuclear projectswere explicitly excluded in the pilot phase and Kyoto commitment period,leaving it open what would happen thereafter (Article 11a, section 3a). Withregard to sinks, their possible inclusion already in the Kyoto commitmentperiod would be reconsidered in 2006 (Section 9). Only with regard tohydro projects was there a clearer regulation than in the original proposal.Hydropower projects with capacity over 20MW would have to comply withthe rules set by the World Commission on Dams (Article 11b, section 6).
The Council and Parliament formally adopted the Directive on 27 October 2004.48 Acore question in Chapter 5 will be why and how these signiﬁcant changes were madein the European Commission’s proposal for a linking directive.
establishing a scheme for greenhouse gas emission allowance trading within the Community,in respect of the Kyoto Protocol’s project mechanisms (Brussels). Available at <http://www.climnet.org/pubs/PropDirectiveJICDM.pdf> accessed 22 May 2007.48 European Parliament (27 October 2004), Directive 2004/101/EC of the EuropeanParliament and of the Council of 27 October 2004 amending Directive 2003/87/EC Establishinga Scheme for Greenhouse Gas Emission Allowance Trading within the Community, in Respectof the Kyoto Protocol’s Project Mechanisms. Only France and Austria opposed the deal.
Table 3.1
Main changes in the European Commission’s proposals for ET and Linking Directives
Commissionproposal for theEC Directive
Commission proposal forLinking Directive
HarmonisationCompliance andCoverageAllocationand centralisationenforcementPenalty: either €50Decentralized setting Start with CO2only and Free of chargefour targeted activities allocation in pilot (pilot phase)/of emission capsphase; next phase €100 (Kyoto phase)Opt-in of additionalto be decided in or twice the averagesectors and activities 2006 reviewmarket price –from 2008 on‘whichever is higher’Changes in theﬁnal Directive:(2003/87/EC)
Links to the Kyoto Protocol–Quantitative cap on imports of JI/CDM credits;– Use of credits only from 2008– No credits from sinks or nuclear power projects– Large hydro-projects to take social andenvironmental impact into accountChanges in the ﬁnal Directive:2004/101/EC
Speciﬁcation thatNational AllocationPlans should beconsistent with‘Kyoto path’(Annex III)
Opening up foropt-out of individualinstallations in thepilot phase (Art.27)– Unilateral optin of additionalactivities (Art. 24)– Opening upfor pooling ofinstallations (Art.28)– Chemicals,aluminium andtransport sectorscandidates for furtherinclusion (Art.30, 2)
At least 95% free Penalty adjusted downof charge in pilot to €40 in pilotphase; at leastphase90% in Kyoto– Reference tophase (Art.10)alternative ‘twicemarket price’deleted (Art.16)
2004/101:– No cap, but supplemental to domestic action. Furtherlimits to be speciﬁed by each Member-state (Art.11 a)–CDM credits to be used from 2005 on (Section 5)–Sinks and nuclear excluded only temporarily–Large hydro-projects to comply withstricter rules (WCD) (Art.11b, 6)
Development of the EU ETS
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Summary of Changes from Proposals to DirectivesTable 3.1 provides a snapshot overview of the relationship between EuropeanCommission proposals and the ET Directive (2003/87/EC)49 and the LinkingDirective (2004/101/EC).50Implementation: From Directive to PracticeImplementing the Emissions Trading Scheme includes several issues. As summedup by Mullins (2005, 183), key tasks for the member-states include:••••••
prepare National Allocation Plans (NAPs);identify, obtain data from and consult the installations that are covered by thescheme;decide on banking, and new entry and closure rules;prepare their permitting procedures;provide guidance on monitoring and veriﬁcation and establish the relevantinstitutions;prepare and set up national allowance registries.51
All these six tasks are important for the functioning of the EU ETS, but theproduction of NAPs is the key element from a policy perspective, as it determinesthe environmental ambitiousness of the system.National Allocation Plans (NAPs)As noted earlier, one of the main outcomes and features of the EU ETS was abasically decentralized approach to the setting of national emission ceilings (caps).Hence, a key instrument for implementing the EU ETS became the productionof National Allocation Plans, starting on 25 June 2003, when political agreementwas obtained on the ET Directive. This Directive contained many important NAPprinciples and signals – particularly Annex III, with 11 guidance points and criteriafor the development of NAPs:
49 European Parliament (25 October 2003), Directive 2003/87/EC of the EuropeanParliament and of the Council of 13 October 2003 Establishing a Scheme for GreenhouseGas Emission Allowance Trading within the Community and Amending Council Directive96/61/EC, Ofﬁcial Journal of the European Union L 275, 32–46.50 European Parliament (13 November 2004), Directive 2004/101/EC of the EuropeanParliament and of the Council of 27 October 2004 Amending Directive 2003/87/EC Establishinga Scheme for Greenhouse Gas Emission Allowance Trading within the Community, in Respectof the Kyoto Protocol’s Project Mechanisms, Ofﬁcial Journal of the European Union L 338,18–23.51 For an instructive introduction to the monitoring and reporting guidelines and theregistries regulation, see Hartridge 2006.
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1. consistency between total quantity of allowances and the member-states’commitments under the Kyoto Protocol;2. consistency between quantity of allowances and assessments of emissionsdevelopment;3. consistency between quantity of allowances and potential to reduceemissions;4. consistency with other Community legislative and policy instruments;5. non-discrimination between companies or sectors;6. information on the treatment of new entrants;7. information on how early action would be taken into account;8. information on how clean technology would be taken into account;9. information on how the public would be involved;10.