Greece gets EU clearance to hand out free carbon permits

Greece is among eight EU nations to have been given approval to issue free 2013 carbon permits, a move that could enable almost a quarter of this year’s long-awaited allocations to be handed out by the end of the week, the European Commission said late Wednesday.

The move, which has been delayed since February, will mean more supply coming to a market already drowning in permits and could pressure permit prices valued at around 5 euros.

Allocation plans for the 2013-2020 phase of the EU Emissions Trading Scheme (ETS) were approved for Greece, Austria, Ireland, Latvia, the Netherlands, Portugal, Sweden and the United Kingdom, the Commission said in a note on its website.

The executive said this meant that allocations representing 23 percent of around 887 million permits due to be handed out this year could soon start to be issued to big-emitting companies such as oil refiners and paper producers.

Failure to receive the certificates before April 30 would mean companies would have to buy permits to cover any shortfall – which could increase carbon prices and a firm’s compliance costs – or face even steeper penalties for not complying.

ETS-regulated companies must by the end of April each year surrender one permit for every tonne of carbon dioxide they emitted over the previous year.

“Following this decision, the administrative steps remaining before the allowances are available on the operators’ accounts can be finalized in one or two days,” the Commission note said, adding national governments were responsible for these steps.

The Dutch emissions authority said on Wednesday night it would transfer 46.8 million allowances into the accounts of Dutch companies before the market opens on Thursday.

Earlier on Wednesday, Britain preempted the Commission announcement by confirming it had been given approval but said it would distribute the allowances only by early January.

Industrial manufacturers get free carbon permits to help them compete with rivals in other countries that have looser environmental regulations than the ETS, the EU’s flagship policy to curb heat-trapping emissions.

This year’s allocation has been delayed largely due to late submissions by governments, preventing firms from estimating the cost of complying, selling surplus permits to raise cash using them as collateral for finance.

The Commission said that 11 nations including major emitters Germany and Poland, representing 49 percent of allowances, were well behind in the four-step allocation process. [Reuters]

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.