Bulgaria has been given the go-ahead from the European Commission to hand out 8.3 million free EU carbon allowances to its utilities for 2015, completing last year’s allocation approvals under article 10c of the ETS Directive.
The seven mostly eastern EU member states that qualify for the programme have been approved to hand out a total 87.5 million of their collective maximum quota of 114.5 million EUAs for 2015.
Bulgaria, which could have applied for as many as 9.7 million free EUAs for 2015 to help its power generators decarbonise, got clearance on Wednesday, according to a Commission update, meaning the country is allowed to distribute the allowances from today.
However, Stephane Colin, director of Sofia-based brokers Saga Commodities, said that due to the upcoming Orthodox Easter four-day weekend, it was unlikely the country’s utilities would receive their units before next week, meaning surrendering them for 2015 compliance was out of the question.
“[The allocation] will go for approval by Bulgaria’s environment ministry, and Saturday the registry is closed so best guess is Tuesday because everything’s also closed on Monday. There is no case where they can surrender these allowances [before the Apr. 30 deadline],” he told Carbon Pulse.
“But you can be sure that these allowances will come for sale on the market very soon,” he added.
Colin said most Bulgarian utilities that were anticipating surrendering these units for 2015 compliance started buying EUAs from the secondary market several months ago as a precautionary measure to ensure they weren’t caught short, and will now likely sell any spare, post-deadline inventories starting next week.
The seven eligible countries can apply for their share of any leftover units in the allowance pot set aside for them before 2020, the end of the current EU ETS trading phase.
Under Article 10c, the countries are set a declining annual quota of free EUAs, but must provide evidence that they have made, or have plans to make, the necessary investments in order to receive them.
The Commission has not yet published an update for this year’s allocations.
By Mike Szabo – email@example.com