European Commission Adopts Decision on Allocation of Free Emission Allowances

27 April 2011: The European Commission adopted a Decision on how free emission allowances should be allocated from 2013 to industrial installations covered by the EU Emissions Trading System (EU ETS).

Although auctioning will become the main principle for allocating allowances as of 2013 under the EU ETS, the Decision sets out the rules, including the benchmarks of greenhouse gas (GHG) emissions performance, to be used by the member States in calculating the number of allowances to be allocated for free annually until 2020, to industry sectors deemed to be exposed to significant competition from outside the EU.

The EU member States are expected to collect the necessary activity data for each relevant installation in their territory, and submit it to the Commission by 30 September 2011. Based on these data, preliminary free allocation per installation will be calculated for each year until 2020. The final allocation per installation is expected to be released in 2012. To this end, the Commission's Directorate-General for Climate Action has developed guidance papers to ensure harmonized implementation of the allocation rules by member States, including a data collection template. [EU Press Release]