Head Office Press Office
- 18-May-2007 - Emissions Trading Scheme
hits 100% compliance in UK
The Environment Agency achieved 100% compliance
with UK installations trading on the European
carbon market last year despite industry
having to purchase more than 30 million
tonnes of extra carbon allowances.
EU Emissions Trading Scheme figures released
today show each of the UK’s 762 big installations
surrendered sufficient allowances to cover
their carbon emissions for 2006. Four companies
received civil penalties totalling £759,000
for failing to do so in 2005.
Environment Agency Director of Environment
Protection, Tricia Henton, said:
"The first phase of the EU ETS (2005-2007)
is focused primarily on making sure the
system works, by achieving a high level
of confidence in the carbon reporting system,
emissions registries and overall trading
arrangements. To achieve 100 percent compliance
across UK industry by the second year of
the scheme is an outstanding result and
reflects the amount of hard work carried
out to ensure a rigorous, consistent and
effective approach to regulation and enforcement.
"The surge in carbon emissions over
and above our national allocation was due
to the UK’s stringent phase one cap and
the increasing use of coal in the power
sector in response to high gas prices, and
demand for oil and iron & steel - forcing
UK industry to buy allowances from the European
trading market.
"Despite this outcome, the first phase
of the EU ETS has exposed crucial information
about prices and emissions that will mean
tougher caps are put in place during the
second phase (2008-2012) to ensure environmental
benefits are achieved.
"And we must not forget that last
year CO2 emissions in the UK were 11 percent
below 11000 levels when the EU ETS is taken
into account. It demonstrates that the United
Kingdom is serious about cutting industry
emissions by setting one of most stringent
carbon caps in Europe.
"The ETS is a blueprint for a post-2012
global scheme to reduce carbon emissions
and the EU has a vital leadership role to
play. There are interested observers world
wide watching to see how the EU ETS develops
and the scheme must not fail."
The EU ETS was set up to help achieve the
EU’s contribution to the international Kyoto
Protocol agreement for reducing carbon dioxide
emissions. Under the protocol the UK has
agreed to reduce greenhouse gas emissions
by 12.5% by 2012. The scheme will also help
to deliver the UK’s domestic goal of reducing
CO2 emissions by 20% by 2010 and 60% by
2050.
The ETS works on a cap-and-trade basis,
with EU Member State governments setting
an emissions cap taking into account all
installations within their country covered
by the scheme. Each operator within the
country is given an allocation of the total
amount; divided into EU Emissions Allowances,
each equivalent to one tonne of CO2. These
include energy production facilities, ferrous
metal production and processing, the production
of cement clinker and lime, glass and glass
fibre, ceramic bricks, pulp from timber
and other fibrous materials, and the manufacture
of paper and board.
Industrial operators that emit more carbon
emissions than their allocation can either
purchase additional allowances from the
emissions trading market, or invest in emissions
reduction measures and sell any surplus
carbon allowances. In the UK, trading in
carbon allowances is handled by the UK Emissions
Registry, where operators also record their
annual verified emissions data and surrender
allowances.
