EU ETS Implementation in the Czech Republic

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EU ETS Implementation in the Czech Republic

• Climate Change Unit
• Ing. Tomá Chmelík
• Ing. Eva najdrová

Tel [phone] Fax [phone]
328 Email Tomas_Chmelik_at_env.cz
Ministerstvo ivotního prostredí Vrovická
65 Praha 10, 100 10
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Basic elements of the EU scheme

• Based on a directive - 2003/87/EC
• Trial initial trading period (2005-2007)
• Selected sectors
• CO2 only
• Lower fine
• Operator of the installation must have a permit
  for carbon dioxide emissions
• Second period 5-year same as Kyoto Protocol
  commitment period (2008-2012)
• Revision of the directive planned

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Implementation of the directive

• Implementing authority MoE
• Proposal prepared by CC Unit and legal department
• Discussed by relevant commissions of the
  Government
• Approved by Government on Sept 15
• Text of course not problems-free

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Other issues

• Implementing regulation (decrees secondary
  legislation) to be followed
• Easier approval (no parliament)
• Technical issues (monitoring, verification, etc.)
• Delay of the law is a problem

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Timing

• Decision about final allocation must be made
  until end of 2004
• Physical allocation onto registry accounts by
  the end of February of relevant year at the
  latest
• Monitoring and reporting of emissions according
  to EC rules - Decision EC C(2004) 130
• Verification of emissions reports by independent
  entity and its delivery to MoE by March 31 at the
  latest ? no transfers of allowances allowed
• Surrender of allowances by April 30 of the
  following year at the latest ? sanctions

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National allocation plan

• Fills up the scheme with trading commodity
• Allowance tradable commodity right to emit
  one tonne of CO2
• Allocation plan sets
• Who gets
• how many allowances
• in what way.

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National allocation plan

• Key part of the EU scheme distribution of
  assets (allowances) to concrete private subjects
• Sensitive issue from national and international
  point of view (competitiveness)
• Subject of revision by EC
• Revised from state aid rules point of view
• Public document

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National allocation plan - criteria

• 11 criteria included in Annex III of the
  Directive
• Some mandatory, some voluntary
• Some affect total allocation, some sectoral or
  individual
• Some relevant for Czech Republic, some not
• Interpretation of one criterion cannot be in
  contradiction of other criterion
• relevant is the one setting the lowest level
  of allocation

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Problems to solve

• Market and allowances
• Legal definition of allowance
• Regulation of market (needed ?)
• Tax and accounting issues
• Harmonization across Europe (?)
• Who will be allowed to trade and under which
  conditions (role and position of brokers)
• What if the whole system is delayed?

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Contacts

• Ing. Tomá Chmelík
• (Head of Climate Change Unit)
• Tomas_Chmelik_at_env.cz
• Ing. Eva najdrová
• Eva_Snajdrova_at_env.cz
• emission.trading_at_env.cz
• www.env.cz